Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS

WELSH OFFICE PROVISIONAL ORDER (LLANELLY)

Bill to confirm a Provisional Order of the Secretary of State relating to the borough of Llanelly, presented by Mr. James Griffiths; read the First time; and referred to the Examiners of Petitions for Private Bills and to be printed. [Bill 140.]

Oral Answers to Questions — WALES

Snowdon National Park (Car Parking Facilities)

Mr. Goodhart: asked the Secretary of State for Wales what action he is taking to improve car parking facilities in the Snowdon National Park and particularly in the Llanberis Pass.

The Under-Secretary of State for Wales (Mr. Harold Finch): Under the provisions of the National Parks Act, 1949, 11 car parks and five lay-bys have been constructed in the Snowdonia Park and two more car parks are expected to be built in the next few months. Proposals for two further car parks and a picnic site in the Llanberis Pass are at present held up because of difficulties in acquiring land, but schemes for four lay-bys are expected to proceed in the next 12 months.

Mr. Goodhart: Will the hon. Member do everything he can to expedite these schemes? The Llanberis Pass is one of the best starting points for climbs up

Snowdon, and at the moment the parking arrangements there are totally inadequate.

Mr. Finch: I appreciate what the hon. Member has said. We shall do all in our power. I would point out that in the first place, at least, the acquisition of land is a matter for the local planning authority and the owners of the land. The Welsh Office becomes involved when it is a question of compulsory purchase. But we will make inquiries and try to speed it up.

Coal Industry (Discussions)

Mr. Box: asked the Secretary of State for Wales what were the subjects of his recent discussions with leaders of the coal industry; and whether he will make a statement.

The Secretary of State for Wales (Mr. James Griffiths): At my meetings with them on 26th March and 13th March, respectively, the Industrial Association of South Wales and Monmouthshire and the South Wales area of the National Union of Mineworkers discussed with me the present position and problems of the coal industry in South Wales.

Mr. Box: Will the right hon. Gentleman give an assurance that the serious subject of rising absenteeism in the coal industry, especially in the South Wales area, was discussed at those meetings? Is he aware that absenteeism is now reaching a level of about 20 per cent. of the total labour force for the whole of each week? It is believed that it is putting about 10s. a ton on the cost of coal. As an old miner, will he appeal to miners in this area not to sabotage their own industry in the face of increasing competition?

Mr. Griffiths: I am aware of the problem to which the hon. Member refers. Most of our discussions were concentrated upon the most serious and the biggest problem which affects the South Wales coalmining industry, namely, the serious shortage of manpower as a result of the drain upon it. I know the miners, and if, with respect, I may say this to the hon. Member, some of the speeches made by him recently, both in tone and content, have not helped to solve the problem.

Mr. Probert: Does my right hon. Friend agree that the hon. Member for


Cardiff, North (Mr. Box) would do a better service to the people of South Wales if he ceased his carping criticism of the mining industry at this time? Does not my right hon. Friend agree that what is required is faith and confidence in the industry in order to encourage miners to remain in it?

Mr. Griffiths: What is required in the industry is a measure of stability, so that we can offer young people who enter it the prospect of a career. Unless we can do that we shall face the very serious situation—for the first time in my experience of the industry—of being short of miners.

Mr. Gibson-Watt: The right hon. Gentleman has not referred to the figures which my hon. Friend gave. Is he prepared to confirm or disagree with those figures?

Mr. Griffiths: The hon. Member used those figures on his own responsibility. I cannot confirm or deny them—[HON. MEMBERS: "Why not?"]—because I have not heard them before. We know quite well that this is one of the problems in the coalmining industry, but it is not the only one, and if we merely emphasise it we may not give sufficient attention to the main problem, which is the serious drain on manpower in the industry, which can have calamitous consequences for this country.

Flood Relief

Mr. Gibson-Watt: asked the Secretary of State for Wales what was the total of claims for relief for flood damage caused in Wales last December; and what percentage of these claims have been met.

The Minister of State, Welsh Office (Mr. Goronwy Roberts): Claims for assistance from the Lord Mayor's Flood Distress Fund numbered in all 1,508, and payments have been made in 890 cases or 59 per cent. Some claims are still under consideration.

Mr. Gibson-Watt: The hon. Gentleman has given the figure of applications and those granted. How long will it be before the rest of these claims have been considered and met? Is he aware that there is a certain amount of apprehension

about this in various parts of Wales where people were affected by the floods?

Mr. Roberts: The assessment of claims and the decision regarding what is proper to pay has proceeded with care and expedition. There are some claims still outstanding and some to be considered again. I can give the hon. Member the assurance that no time has been lost consistent with dealing with this fund in a proper manner, and certainly no time will be lost in the future.

Mr. Peter Thomas: Is the hon. Gentleman satisfied that there is enough money to meet the claims put in?

Mr. Roberts: The amount of money to be dispersed is contingent on the public response to the appeal plus the pretty generous subvention from the Treasury to the fund. Everyone would wish to see more money in the "kitty" to be used for this purpose, but we are satisfied that cases of real hardship, for which this fund was normally intended, will be met fairly substantially.

Mr. Hooson: Can the Minister confirm that if a case of real hardship has been overlooked they are prepared to look at it again and revise their view about whether compensation should be paid?

Mr. Roberts: Yes, certainly. It must be an exceptional case, because all these hundreds of claims have already been carefully considered by professional assessors and cannot be looked at again in detail. If the hon. and learned Gentleman, or anyone else, has evidence of a claim which seemed to have been overlooked or not fairly treated, they can bring the evidence to me or forward it direct to the Lord Mayor's Distress Fund at the Mansion House, Cardiff.

Mr. Gibson-Watt: asked the Secretary of State for Wales how much money was raised by the Lord Mayor of Cardiff's Flood Relief Appeal and how much was added to it by the Government to meet appeals for 1964 flood relief in Wales.

Mr. Goronwy Roberts: The Lord Mayor has to date received a total of £8,498 in response to his appeal and the Government have supplemented this with a grant of £25,000.

Mr. Gibson-Watt: While recognising that the comparison between these figures is wide, may I ask whether the hon. Gentleman is satisfied that the figure of £25,000 from the Government will be adequate to deal with the very large number of cases revealed to us by his previous Answer? He will remember that on 15th December he made a very sympathetic and correct statement, which was followed by the speech of his right hon. Friend in the Welsh Grand Committee on 16th December. Can we be certain that the amount forthcoming from the Government will be adequate to deal with this distressing problem?

Mr. Roberts: The hon. Member will agree that the Government subvention is pretty substantial. It is a generous contribution considering the amount of the public response, and compares very favourably with the attitude of the then Government at the time of the Sheffield storm damage appeal in 1962. Nevertheless, we share the desire of the hon. Gentleman that as many as possible of these flood victims may be helped as soon as possible. So far, resting on the recommendations of professional assessors, we find that practically all who have a valid case have been helped to some extent and others will be considered in the way that I indicated to the hon. and learned Member for Montgomery (Mr. Hooson).

Fforchaman Colliery

Mr. Probert: asked the Secretary of State for Wales what action he will take to provide employment for the 500 men likely to be affected by the closure of Fforchaman Colliery.

Mr. James Griffiths: I understand that discussions are taking place between the National Coal Board and the National Union of Mineworkers on the future of Fforchaman Colliery. If it is decided that the pit should close, I am informed that the National Coal Board expects to be able to offer jobs in other pits in the area to all the men affected, so that there should be virtually no redundancy. However, I recognise the concern of my right hon. Friend about the general employ-
ment position in the Aberdare Valley and I shall be very happy to discuss this with him.

Mr. Probert: I thank my right hon. Friend for the suggestion contained in his Answer. Would not he agree that what is of vital concern to my constituents is the loss of 500 jobs? If the effort to retain the colliery should prove unsuccessful, will he consult his right hon. Friend the President of the Board of Trade to see what may be done to provide alternative employment?

Mr. Griffiths: I am concerned about this closure and the fact that the number of jobs available would be reduced, particularly for young people. I will bear in mind what my hon. Friend has said. I should like to discuss the matter with him.

Leases (Extension)

Mr. Box: asked the Secretary of State for Wales whether he will issue a circular to recommend local authorities in Wales to extend any leases expiring in the near future on the same terms and until such time as the leasehold Bill is introduced.

Mr. James Griffiths: As I informed the hon. Member in reply, to his Question on 21st January, I do not wish to anticipate the legislation to which my right hon. Friend, the Minister of Housing and Local Government, referred to in his statement on 8th December last.

Mr. Box: Could not the right hon. Gentleman be a little more precise about when this important leasehold Bill is to be introduced? Is he aware that many of his hon. and right hon. Friends who have been very vocal in the past in their criticism of the system, are now strangely silent? Is he further aware that many people feel that the Government are deliberately dragging their feet in the hope of being rescued by a General Election defeat and so avoid having to introduce this legislation?

Mr. Griffiths: I have told the hon. Member before that I share his anxiety that this legislation should come in as soon as possible. It will come in the course of this Session.

Oral Answers to Questions — EDUCATION AND SCIENCE

New Medical Schools

Dr. Summerskill: asked the Secretary of State for Education and Science what plans he has for increasing the number of medical students.

Mr. Peter Walker: asked the Secretary of State for Education and Science if he will make a statement on the establishment of new medical schools.

The Secretary of State for Education and Science (Mr. Anthony Crosland): My colleagues and I are giving close attention to this matter, and I am not yet in a position to make a statement on it.

Dr. Summerskill: Will my right hon. Friend realise that, due to the shortage of doctors, it would be necessary to have at least five new medical schools and even then they would be producing only 400 more doctors a year? If we get the medical schools, would my right hon. Friend site them in the industrial north of England because doctors tend to settle near where they have been trained? If he intends to expedite the number of students in medical schools, will he please abolish the quota for women which exists in the London medical schools, so that we may get the best people?

Mr. Crosland: There are two questions here. There is the expanding need for more medical students and how it may be met, whether by the provision of new medical schools or the expansion of existing ones. The whole matter is being considered by an official working party representing the Treasury, the Minister of Health, the U.G.C., the Scottish Health Department and my own Department. Until it has produced its conclusions I cannot go further. I will make one further point, which is that the final answer will inevitably depend upon the general review of plans for public expenditure to be undertaken by the Chancellor of the Exchequer.

Mr. Walker: Will the right hon. Gentleman give some indication of when he expects that he will be able to make his statement, as this was one of the promises in the election manifesto about which people considered that the Government were poised ready for action?

Mr. Crosland: The Government are poised ready for any action at the right moment on every conceivable subject, but naturally it must be at the appropriate time. I am extremely sympathetic to the case my hon. Friend has made. As to the timing of this statement, it is a complicated issue and I do not think that it would be before the summer.

Mr. Solomons: When considering the siting of new medical schools, will the Minister pay particular attention to the requirements of Hull University which has long sought a medical school?

Mr. Crosland: Yes, Sir.

Sir E. Boyle: Can the right hon. Gentleman yet say anything about the inquiry into medical education, bearing in mind the fact that I was under criticism from the present Minister of Health for not having been able to make a statement on this very nearly a year ago?

Mr. Crosland: Not yet.

Agricultural Research

Mr. Charles Morrison: asked the Secretary of State for Education and Science what steps he has taken to expand the work of the Agricultural Research Council and other organisations engaged in agricultural research.

Mr. Crosland: This year's Estimate for the Agricultural Research Council, for which I am responsible, is rather more than £1 million larger than the grant for last year. Other organisations are the responsibility of my right hon. Friends, the Secretary of State for Scotland, and the Minister of Agriculture, Fisheries and Food.

Mr. Morrison: Can the right hon. Gentleman say whether he has had discussions about what aspects of research in agriculture should be expanded?

Mr. Crosland: Yes Sir. Recently, expansion has been greatest in food research. The new Food Research Institute and the Meat Research Institute are both due to be completed in 1967. There is also an important new nitrogen fixation unit established at the University of Sussex.

Mr. Peter Mills: Will the Minister bear in mind the vital necessity for agricultural research, particularly into types and


breeds of animals, to meet the new market requirements?

Mr. Crosland: Yes, Sir. I shall certainly bear that in mind. I would point out that the increase of over £1 million represents a rise of 15 per cent. in spending this year over last year.

Professional Wrestling (Control Body)

Sir J. Langford-Holt: asked the Secretary of State for Education and Science whether he will take steps to set up a control body for professional wrestling similar to that in existence for boxing, in order to ensure that higher standards are maintained than at present.

The Joint Under-Secretary of State for Education and Science (Mr. Denis Howell): No, Sir.

Sir J. Langford-Holt: Can the hon. Gentleman tell the House how long the great British public are to submit to these rehearsed charades which go on in the name of contests and on which, incidentally, no bookmaker will take a bet? Can he offer the House any advice as to how the standard of these alleged contests can be brought up to the level of other types of wrestling?

Mr. Howell: I am happy to say that I do not think that this falls within my responsibility, but it might encourage the hon. Member if I tell him that these professional wrestlers—of whom, I understand, there are about 400—have now formed a private wrestlers' union and, very appropriately, have affiliated themselves to the Variety Artistes' Federation.

School Meals

Mr. Dodds: asked the Secretary of State for Education and Science if lie will make a statement on the results of the consideration he has given to whether any change is necessary in the quantities and types of food recommended for the school dinner in Circular No. 290 of 1955.

Mr. Murray: asked the Secretary of State for Education and Science, in view of the representatinos made to him by the Association of Education Committees, the National Association of Divisional Executives and the Institutional Management

Association on school meals as set out in Circular 290, what action he proposes to take; and if he will make a statement.

Mr. Rhodes: asked the Secretary of State for Education and Science, in view of the representations made to him by various local education authorities, if he will now take action on the question of the quantities and types of food recommended for the school meals in Circular No. 290 of 1955; and whether he will make a statement.

The Minister of State, Department of Education and Science (Mr. R. E. Prentice): My right hon. Friend has set up a working party to review the nutritional recommendations made in the Department's Circular 290 of 1955, with special reference to the question of adjusting the proportion of first-class protein for children in different age groups, and to consider whether the present type of school dinner is appropriate in the light of changes in family feeding habits.

Mr. Dodds: While thanking my hon. Friend for that information, and bearing in mind that for most children the school dinner is the main meal of the day, may I ask him to consider recommending to the working party that they might find it useful and illuminating if all school-children were asked to write an essay on school dinners?

Mr. Prentice: I know that this proposal is not in front of the working party, but I have no doubt that its members will have noted the supplementary question of my hon. Friend.

Mr. Murray: I should like to thank my hon. Friend for that Answer, but in view of the fact that circular 290 was issued in 1955, may I ask him to ensure that the working party gets on with this job as soon as possible so as to meet some of the criticisms which have been made by such associations as the National Association of Divisional Executives for Education?

Mr. Prentice: Yes, Sir. The working party hopes to finish its work during the summer.

Mr. Rhodes: Is my hon. Friend aware that his Departmental officers in Newcastle-upon-Tyne, according to the Director of Education of that city, are


acting in an uncompromising manner in carrying out the regulations, and that the L.E.A. has been pressed to take the cheapest cuts of meat? Will he draw the attention of the working party to the fact that growing teen-agers do not need sloppy custards and milky puddings but more good meat?

Mr. Prentice: The Department has had representations from local authorities over a period along these lines. It is for these reasons, and because there seems to be a prima facie case for looking at this question, that the working party was established. I know that the House would not expect me to anticipate its recommendations.

Mr. J. H. Osborn: Would not the hon. Gentleman agree that, after 10 years, it is time that we got a move on with this?

Mr. Prentice: I should have thought that we had got a move on. The working party was appointed some months ago and will be reporting to us during the summer. I do not want to make any invidious comparisons, but I think that we have moved fairly quickly on this important subject.

Minor Works Programme

Mr. Palmer: asked the Secretary of State for Education and Science if he will now reconsider the 1965–66 financial arrangements for the schools minor works programme in order to give greater assistance to authorities such as Bristol proceeding with progressive schemes of educational redevelopment.

Mr. Prentice: No, Sir. These arrangements are necessary in order to secure a fair distribution of resources among local education authorities throughout the country.

Mr. Palmer: Will my hon. Friend bear in mind the importance of giving progressive and farsighted education authorities such as Bristol which are proceeding with comprehensive education the maximum financial support?

Mr. Prentice: Yes, Sir. The amount of allocation made for minor works programmes under all Governments for a very long time has, unfortunately, been only a fraction—approximately a third or

less—of the bids made by authorities. This applies whether the authorities are progressive or otherwise. We shall be doing as much as we can in this direction in future.

Sir E. Boyle: Will the hon. Gentleman agree that, despite the very high level of school improvements during the last 10 years, we on this side have never denied that a high level of improvement work still needs to be done? Will the hon. Gentleman consistently give priority to this rather than going hell-for-leather for imposing comprehensive schools all over the country?

Mr. Prentice: In the view of the Government, we need to do a great deal more about the state of our school buildings and bring in these overdue reforms in secondary education. The two aims are not conflicting. They must proceed on a complementary basis.

Mr. Robert Cooke: Will the hon. Gentleman shut out of his mind the remarks of his hon. Friend the Member for Bristol, Central (Mr. Palmer) about this scheme for helping comprehensive schools? This is a vital matter concerning the spending of local money on small improvements which Labour Members complain are not being done.

Mr. Prentice: No, Sir; I will not shut out of my mind the remarks of my hon. Friend. The comprehensive plans of the Corporation of Bristol to reorganise its secondary education were approved by my right hon. Friend the Foreign Secretary when he was Secretary of State for Education and Science. They seem to be good schemes and they have the support of the Department.

Bideford East of Water School

Mr. Peter Mills: asked the Secretary of State for Education and Science in what way provision of classrooms, showers, toilets, and other accommodation at Bideford East of Water falls short of the standards laid down by his Department.

Mr. Prentice: I understand from the Devon Authority that the teaching area of the school is 1,600 sq. ft. below the minimum standard. The school is short of five toilet fittings and seven washbasins, and there is an insufficient supply


of warm water. There is no staff room. Both the site and playing fields are below the minimum size laid down. There is no requirement for showers in a primary school.

Mr. Mills: Will the Minister bear in mind the very real problems through which this school is going and also that it is in a development district and therefore is an area with a rising population? Will he see that adequate funds are provided so that the school can be rebuilt?

Mr. Prentice: The Devon local education authority included this school among its proposals for the programmes from 1965 to 1968. It was not included in the programmes approved by the late Government. The authority has recently made further representations with particular reference to the point, which the hon. Member has made, about it being in a development district. We are considering these carefully at the moment.

Mathematics

Mr. Sheldon: asked the Secretary of State for Education and Science what plans he has to encourage the study of mathematics at sixth form level, as a prerequisite to the education of scientists and engineers.

Mr. Crosland: The Schools Council is conducting a general review of the sixth form curriculum, which will include a study of sixth form mathematics. They are also publishing a Bulletin on primary mathematics, and collaborating with the Nuffield Foundation in a primary mathematics project. Secondary mathematics including sixth form mathematics is being studied by the "School Mathematics Project" the Director of which is Professor Thwaites of Southampton University. My Department organises a number of short courses for mathematics teachers.
The supply of graduate school teachers of mathematics was recently examined by a Committee under the chairmanship of Sir Nevill Mott. Its report recommended a continuing expansion of university mathematics departments and a broadening of the range of courses which they offer, in order to provide the schools with a sufficient supply of teachers of mathematics.

Mr. Sheldon: While thanking my right hon. Friend for his very encouraging reply, may I ask him whether he is aware that if mathematics is not studied at sixth form level, it is rarely acquired at a later stage in life and that this subject is crucial to the training of engineers, scientists and many others? Will he consider the setting up of a course specially suitable to the needs of such people?

Mr. Crosland: I am well aware of the consideration which my hon. Friend advances, but I think that the answer which I gave shows that a great deal is going on in order to try to improve the present situation.

Mr. J. H. Osborn: While welcoming the fact that Professor Thwaites is heading this committee and that the Schools Council is working on this and backing up the work of the Nuffield Foundation as well, may I ask whether the right hon. Gentleman can give any indication of the progress of the work, because this is a complicated subject? What contact is there with the schools?

Mr. Crosland: As the hon. Member knows, the schools are heavily represented on the Schools Council, so that contact is very close. Very good progress is being made. I am seeing Professor Thwaites tomorrow morning to discuss with him how the future looks.

Northam Primary School

Mr. Peter Mills: asked the Secretary of State for Education and Science in what way provision of classrooms, showers and toilets and other accommodation at Northam Primary School falls short of the standards laid down by his department.

Mr. Prentice: I understand from the Devon authority that the teaching area of the school is 484 sq. ft. below the minimum standard. The school is short of five washbasins and there is no supply of warm water. The school has no staff room. The site is below the minimum size and there is no suitable playing field. There is no requirement for showers in a primary school.

Mr. Mills: Though not to blame for these conditions, does not the Minister bear a heavy responsibility because nothing is being done about it now?
Indeed, is not the future even bleaker under a Socialist Government?

Mr. Prentice: That supplementary question was rather unfortunate because, had I been asked, I should have said that if the authority puts this into its revised bids for what remains of the 1967–68 programme, we should consider it carefully and sympathetically.

Public Schools

Mr. Marten: asked the Secretary of State for Education and Science what progress he has made in setting up an educational trust with a view to the integration of the public schools within the State system of education.

Mr. Park: asked the Secretary of State for Education and Science if he will now make a further statement on the integration of independent schools within the State system.

Mr. William Hamilton: asked the Secretary of State for Education and Science what progress he has made in his discussions on the future of the public schools, and their integration within the public system.

Mr. Crosland: I will make a statement as soon as I am ready.

Mr. Marten: Can the Minister say, if the public schools refuse integration and if the Labour Party insists on integration—and must therefore compulsorily purchase the public schools at a fair price and pay for the goodwill—what will be the total cost of this operation?

Mr. Speaker: Order. That supplementary question began with two propositions, beginning with the word "if", which makes it hypothetical.

Mr. Marten: Would the Minister—

Mr. Speaker: Order. It is out of order, because it is hypothetical.

Mr. Park: Would not my right hon. Friend agree that one of the major principles of the integration of the public schools into the State system should be public control of the whole of the intake, in accordance with a formula based on need which the Minister will himself determine? Would not he further agree that there is no need at all to hesitate

before introducing legislation should it prove that it is impossible to reach agreement on these principles with the public schools authorities?

Mr. Crosland: I will pay the closest attention, as I always do, to the views of my hon. Friend on this subject, without necessarily accepting the principles which he is suggesting.

Mr. Hamilton: In view of the likelihood of quite protracted negotiations on this matter, would my right hon. Friend consider, as an immediate step, introducing the quota system of teacher allocation to the public schools in order to redress the balance of teacher facilities vis á vis the public sector and the private independent sector?

Mr. Crosland: I will certainly consider that, without committing myself in advance.

Mr. Marten: Could the Minister give the value of the public schools in the event of them being taken over?

Mr. Crosland: No, Sir. As far as I know, no such valuation has ever taken place.

Sir E. Boyle: Would not the right hon. Gentleman agree that this highly important subject is really too big for Question Time and that, in view of the speeches which Ministers have made on this subject recently, a statement is desirable as soon as possible? In the light of the supplementary question of the hon. Member for Fife, West (Mr. William Hamilton), would not the right hon. Gentleman agree that I made a suggestion myself on this subject in last Friday's debate, while at the same time pointing out that a quota system really could not be applicable to the independent schools?

Mr. Crosland: I am aware of the statement made by the right hon. Gentleman on Friday. As to timing, of course I will make a statement as soon as possible. As hon. Members are aware, this is a highly complex and complicated question and I am not going to be rushed into making a statement. I will do so as soon as I am satisfied that we have a sensible statement to make.

Mr. Snow: Is my right hon. Friend aware that there are public schools and


public schools? [HON. MEMBERS: "Hear, hear."] Will he be careful not to introduce into the State system an adulterating element from some of the quaint establishments that call themselves public schools?

Mr. Crosland: I shall certainly try to guard against introducing adultery into the State system. I take note of what my hon. Friend said.

Secondary Education Reorganisation (Circular)

Mr. Geoffrey Lloyd: asked the Secretary of State for Education and Science whether he will publish his proposed circular on the reorganisation of secondary education in the form of a White Paper.

Mr. Crosland: No, Sir. The circular itself, when issued, will be placed in the Library and will be on sale to the public.

Immigrant Children (Vocational Guidance)

Mr. Geoffrey Lloyd: asked the Secretary of State for Education and Science whether he will ensure that the staff of secondary schools who give guidance on careers are aware of the special need of early advice to parents of immigrant children particularly those who may be seeking clerical and similar posts.

Mr. Denis Howell: I am sure that the teachers concerned and youth employment officers are aware of what is needed. Vocational guidance is a skilled job which involves dealing with people as individuals. Advice to school leavers depends upon their aptitude, scholastic achievement, and personality as well as upon employment opportunities. This is not a subject in my view suitable for a mass approach and I have every confidence in the professional competence of teaching and youth employment staff to give all school leavers the guidance which is in their best interests.

Mr. Lloyd: Does the hon. Gentleman recollect that in the Third Report of the Commonwealth Immigration Advisory Council special action is urged on this subject and that in the opinion of many of us it is important that this difficult subject should be helped by

giving young people a fair start in life? Does he not agree that some special effort by the authorities is required?

Mr. Howell: I am indeed grateful to the right hon. Gentleman for mentioning that, and I hope that this Question will help to encourage schools in that direction. We particularly want to maintain contact between schools and the youth employment officers. This will be one of the things to which we will pay special regard in the circular which my right hon. Friend will shortly be sending out to local authorities.

School Career Departments

Mr. Park: asked the Secretary of State for Education and Science what action he is taking to encourage the development of school career departments.

Mr. Prentice: I would refer my hon. Friend to the Answer I gave to the hon. Member for Brentford and Chiswick (Mr. Dudley Smith) on 18th March, 1965.

Mr. Park: Would not my hon. Friend agree that there is a great deal of dissatisfaction among careers masters and mistresses about the present state of accommodation and equipment? Would he undertake to consult with the local education authorities to see if it would be possible to make provision for school careers departments in the plans of new school buildings?

Mr. Prentice: I will certainly bear in mind the point made by my hon. Friend. We are considering a number of aspects of this problem at the moment with a view to stimulating the growth of careers advice in one form or another.

Mr. J. H. Osborn: Would the Minister of State agree that contact with industry is of great importance? What is he doing to encourage contact between careers masters and local industry, as well as through directors of education?

Mr. Prentice: Yes, Sir. I certainly agree that contact with industry is important. The Ministry is at present preparing a pamphlet on these matters for consideration in the schools. We run courses for careers masters and a one-term course is provided by one of the colleges of education. We regard this


as something which must be expanded and improved in all these ways and we will be grateful for any other suggestions which are made from either side of the House in this connection.

Huddersfield College of Technology (Department of Music)

Mr. Lomas: asked the Secretary of State for Education and Science if he is aware of the need for a college of music for the Yorkshire area; and, in view of the valuable work already being done by the Department of Music at the Huddersfield College of Technology, if he will seek to develop this department as a regional college of music centred on Huddersfield.

Mr. Prentice: This flourishing department is already regarded as a regional centre for courses in music. There is mutual benefit and cultural advantage from its association with the other departments of the regional college and, as at present advised, my right hon. Friend does not think that its separation would he an improvement.

Mr. Lomas: Is my hon. Friend aware—I am sure that he is—that as long ago as 1958 the Yorkshire Council for Further Education recognised this to be a regional college of music and, in the interests of the people in the Yorkshire region who are anxious to obtain a musical education, will he further consider the suggestions made in the Question?

Mr. Prentice: I will certainly consider any specific points which my hon. Friend may care to send to me on this subject. As we see the position at present, we consider that the balance of advantage lies in the college being associated with the other departments concerned. There is a building project at the moment to expand the accommodation of the music department of the college, so it is not very likely that we will change our policy on this at this stage. However, we will consider any further points my hon. Friend may care to make.

Sir E. Boyle: As one who has heard a performance in this college, and a very good one at that, may I ask the hon. Gentleman to consider this matter

carefully and bear in mind the very great advantage of having a first-class musical section as part of a college of a deservedly high standard and the danger of having too many institutions within our further education system?

Mr. Prentice: Yes, Sir.

English Schools Athletic Association

Mr. Milne: asked the Secretary of State for Education and Science what assistance he will give to the English Schools Athletic Association in connection with their annual sports at Watford in July, 1965.

Mr. Denis Howell: My right hon. Friend is considering an application for grant towards the expenses of the general administration of the Association. He has not received any application for assistance with the expenses of the national championships and understands that the Association regards grant to its headquarters administration as the more important.

Mr. Milne: Is my hon. Friend aware that this will give considerable satisfaction in the quarters concerned and that we look forward to continuing interest in this in future?

Sir G. Nicholson: Would the hon. Gentleman say what the present policy is in respect of giving grants for assisting sports? Is he waiting until he has all the applications before making them, or are they being made piecemeal?

Mr. Howell: I take it that the hon. Gentleman is referring to school sports which are the subject of the Question. In that case, I can inform him that one of the first things we did was to send for the English Schools Athletic Association and tell its members that for the first time they were to receive practical financial encouragement in their work.

Chelsea College of Science and Technology

Mr. Goodhew: asked the Secretary of State for Education and Science whether he has yet reached a decision concerning the move of the Chelsea College of Science and Technology to Hertfordshire as the basis of a new university.

Mr. Crosland: No, Sir.

Mr. Goodhew: Is the right hon. Gentleman aware that that reply will bring great disappointment to Hertfordshire, which is waiting to welcome the Chelsea College to its bosom? Is he aware that the City of St. Albans is ideally situated for such a university, and is especially suitable because of its ancient abbey and long historical associations?

Mr. Crosland: I am well aware of the strong views held on this matter in St. Albans in particular and in Hertfordshire in general. Certainly there will not be any disappointment among well-informed people, who know quite well that I am unable to take this decision until I receive the advice of the University Grants Committee and that that Committee cannot tender its advice to me until it, in turn, has received the views of the governing body of the college on the recommendations of the Academic Advisory Committee.

Captain Litchfield: Can the right hon. Gentleman say what use will be made of the present building if and when the Chelsea College moves?

Mr. Crosland: No decision has yet been made as to whether the college will move or, if it does move, to where.

Mr. Hogg: When does the right hon. Gentleman expect to be in a position to make this statement? Is anything else holding up the decision, apart from the two steps to which he referred earlier?

Mr. Crosland: No, Sir. Nothing more is holding it up although, as the right hon. Gentleman knows, there has been a great deal of disagreement on this subject in the past. The University Grants Committee has now received the advice of the governing body and of the Academic Advisory Committee. I hope that I will receive its views and that I will be able to reach a speedy decision.

Mrs. Shirley Williams: Would my right hon. Friend give an assurance that the sites proposed for the university will be considered solely on their merits since it is the view of the new town of Stevenage that it can offer all the advantages of St. Albans and more?

Nursery Schools

Dr. Summerskill: asked the Secretary of State for Education and Science if he will withdraw Circular 8/60, in order to enable all local education authorities to provide as many nursery schools as they consider to be necessary.

Mr. Crosland: No, Sir. We still cannot afford to divert teachers from older children. But I am considering what more can be done to extend nursery provision where this will enable more married women teachers with young children to return to service.

Dr. Summerskill: Would not my right hon. Friend agree that this discriminates unfairly in favour of married women teachers against the children of women who wish to return to medicine, science or nursing, where they are badly needed?

Mr. Crosland: I am aware of this consideration, but I simply must give priority at the moment to married women returners in view of the desperate shortage of teachers in our primary and secondary schools.

Mr. Ogden: Would my right hon. Friend agree that under the previous Administration local education authorities were told that nursery school buildings might be provided if they found the teachers but that they could not find the teachers until they had the buildings? Will my right hon. Friend be bold in this matter, provide the buildings and then allow the local education authorities to provide the teachers? Will he try some experiments?

Mr. Crosland: I could not commit myself to that suggestion but, as I said, I am not satisfied with the way in which this concession is working. I should like both to make the existing concession more effective and, if possible, to widen it somewhat.

Teachers (Immigrant Children)

Mrs. Renée Short: asked the Secretary of State for Education and Science how many local education authorities have requested additional teachers, over and above their quota, for remedial teaching with children coming from the Commonwealth.

Mr. Denis Howell: Fourteen local education authorities have requested increases in their teacher quotas for January, 1966, to help them in staffing schools with substantial numbers of immigrant children from the Commonwealth and elsewhere. Thirteen of these authorities have received increases for this purpose, and one application is still being considered.

Substandard Schools

Mrs. Renée Short: asked the Secretary a State for Education and Science how many substandard schools, primary and secondary, are still in use; and what would be the cost of bringing these up to standard, either by remedial works or by replacement.

Mr. Crosland: I am sending my hon. Friend a copy of the report of the school building survey carried out in 1962, which was published in January of this year. The introduction explains why particular schools were not identified as substandard. A figure of £1,368 million was named in the survey as the cost, in 1962, of bringing all schools in England and Wales up to standard. But it was made clear that the results of the survey were subject to very important qualifications which deprived them of immediate practical significance.

Mrs. Short: May I thank my right hon. Friend for that reply, and ask him whether he does not think that this expenditure is perhaps the reason why the publication of the report was delayed until after the election; and that we are now faced with this considerable expenditure in order to bring our schools up to date after 13 years of neglect by Conservative Governments?

Mr. Thorpe: Arising out of that supplementary question, may I ask whether the Minister would at least set himself the target that within 18 months it can no longer be said that we have schools without running water or electricity, and in which a bucket is not the only form of sanitation, which is a situation particularly true in rural areas? Will he try to do something about it quickly?

Mr. Crosland: I share the hon. Gentleman's desire completely, but we really

are suffering from the appalling backlog of the neglect of the last 13 years.

Sir E. Boyle: Would not the right hon. Gentleman agree that only in 1963 we had £200 million worth of school improvements under construction? And is it not a fact, bearing in mind what was said at the last election, that the last thing the people expected from the new Government was the reduction in the amount of the minor works programme that has been made?

Mr. Crosland: I am sorry that the right hon. Gentleman and his hon. Friends should continually give a false impression of the school building programme. If we take what is relevant to the building survey that is under discussion, the total school building programme this year at well over £100 million will be something like £20 million higher than it was last year.

ARMED FORCES, GERMANY (SUPPORT COSTS)

Mr. Kershaw: asked the Prime Minister whether, following the further Ministerial talks, he will now make a statement on German support costs.

The Prime Minister (Mr. Harold Wilson): I have nothing to add to the Answer given on 15th April by my right hon. Friend the Lord President to a Question by the hon. Member for South Angus (Mr. Bruce-Gardyne).

Mr. Kershaw: Does the Prime Minister recollect that on 11th March he said that if he did not get an agreement within a few weeks he would denounce the existing agreement at the beginning of April? Is not his reply very disappointing? Is it not a further example of his talent for words rather than deeds?

The Prime Minister: What we are concerned with, despite the hon. Gentleman's words, is trying to get the matter put right. As I have said, my hon. Friend the Chief Secretary to the Treasury is going over to settle the matter, one way or the other, once and for all, on 10th and 11th June.

Mr. Soames: Is the right hon. Gentleman satisfied with the rapid progress to which he referred on 11th March, which


he expected in those few weeks? When he was in Bonn, is he aware that the Germans were at that moment in the course of discussions with the French, leading to agreement for the supply of £136 million worth of arms from France? Would he expect to get an order of anything like that character? Is this his idea of knocking hell out of them—or have the Germans told him to go to blazes?

The Prime Minister: Not bad for a first effort, but I had better say to the right hon. Gentleman that a great deal of progress is going on at official level and, in addition, my right hon. Friend the Secretary of State for Defence has been over there discussing this question.
With regard to the right hon. Gentleman's story about the £135 million, he really is big enough now not to believe everything he reads on the front page of yesterday's Daily Express. That particular statement gave a general figure covering all possible conceivable projects—many not yet agreed, or even on the drawing board—for the next 10 years. It bears no comparison with the figures we are talking about for this year and last year, but is a figure which is included in the German orders that were let slip to the French when the right hon. Gentleman was a member of the Cabinet last year.

Mr. Soames: Is the right hon. Gentleman satisfied with the progress he has made? He was telling us two months ago that if he did not make progress rapidly in the next two months he was going to alter the agreement. Is he satisfied with the progress made, and has he anything tangible to support this two months later?

The Prime Minister: The answer is that my hon. Friend the Chief Secretary has been there for the second part of the negotiations which I started. A lot of work is going on, and if we do not get satisfaction I have already told the House what our attitude will be.

Mr. Shinwell: Is my right hon. Friend aware that the previous Government, after several years of negotiations with the West German Federal Government, and under pressure from myself and many other members of the previous Opposition, never reached a satisfactory con-

clusion? At the same time, would my right hon. Friend take note of the report about the arrangements between the West German Government and the French Government, and try to get some satisfactory arrangements with the German Government?

The Prime Minister: I am well aware of the achievements, if one can use that word, of the previous Government but in reference to the particular deal that was trumpeted by the Daily Express yesterday, which has so excited the right hon. Gentleman, so far as we can obtain information on this, there is little, and possibly nothing, new in this compared with the orders already placed with the French Government by the German Government when the right hon. Gentleman was in the Cabinet.

HUMAN RIGHTS

Mr. Higgins: asked the Prime Minister what decision has now been reached by Her Majesty's Government regarding the recognition of the competence of the European Commission on Human Rights to receive petitions within the terms of Article 25 of the Convention for the Protection of Human Rights and Fundamental Freedoms; and if he will now declare, pursuant to Article 46 of the Convention for the Protection of Human Rights and Fundamental Freedoms, that he recognises as compulsory, ipso facto and without special agreement, the jurisdiction of the European Court of Human Rights on all matters concerning the interpretation and application of the Convention.

The Prime Minister: I have as yet nothing to add to the Answer I gave to a similar Question by the hon. Member on 9th February last.

Mr. Higgins: Is the Prime Minister aware that this is a very disappointing Answer for those who are concerned with human rights and who thought that the Government might take an early decision on the matter? Surely, this country has nothing to lose in granting the right of individual petition to an impartial judicial body. Will the right hon. Gentleman give us some idea of the reasons that are giving him difficulty in reaching a decision adhering to these Articles?

The Prime Minister: I think that the hon. Gentleman will realise that this is a matter of supreme importance, and extremely complex. I share his disappointment that within six months we have not been able to reach a conclusion. I am a little disappointed. But the Convention was, in fact, signed and ratified in 1951, and, in view of the urgency, I think we might have expected a little more progress and speed a little earlier than the last six months.

Sir Knox Cunningham: Will the right hon. Gentleman take care before taking any step that might mean that decisions of our own courts of appeal are over-ridden by a European court of first instance?

The Prime Minister: I always take very great care in all these matters of human rights that are so dear to the hon. Gentleman.

CIVIL SERVICE (POSITIVE VETTING)

Dame Irene Ward: asked the Prime Minister who are the three advisers who comprise the committee charged with the carrying out of positive vetting of the Civil Service.

The Prime Minister: There is no committee of three or any other number concerned with positive vetting of the Civil Service; an advisory committee of three, Sir David Milne, Sir James Crombie and Mr. G. A. Stevens, which has no responsibility for carrying out positive vetting of the Civil Service, operates on terms of reference which were announced in the House on 30th January, 1957.

Dame Irene Ward: Then can the right hon. Gentleman say who is responsible for positive vetting, particularly in view of the fact that there have been two recent cases of people who have been charged with espionage? Could he describe in detail whether he is satisfied that the positive vetting now in operation—who-ever does it—is a really satisfactory type of vetting, and has good results?

The Prime Minister: The responsibility in these matters in the present Government, as was the position in the previous Government, is in the hands of the Ministers concerned and, ultimately, of

the Prime Minister. I would find it a little difficult to refer to the cases mentioned by the hon. Lady as they are sub judice, but since she asked me whether I am satisfied with the procedures followed in the past I may say that I am very much dissatisfied with them, but the House will understand that I cannot make a statement on the question until certain matters have been disposed of before the courts. I hope to make a statement to the House in the near future.

Mr. Stainton: Can the right hon. Gentleman tell us what is the precise rôle of the Paymaster-General in this particular matter?

The Prime Minister: I may even have something to say on that subject when I am free to make a statement on security. I am sure that the hon. Gentleman will realise that this Government, on coming into office, decided to set on foot all the arrangements necessary so that we should never again have a situation of a Prime Minister saying that he had never been told about security matters that had been common knowledge for three months.

MINISTERS (PUBLIC PROCESSIONS AND DEMONSTRATIONS)

Mr. Marten: asked the Prime Minister what are the instructions given to Ministers about taking part in public processions and demonstrations of a controversial nature.

The Prime Minister: In these and similar matters Ministers are guided by the principle that they must so order their affairs that no conflict arises, or appears to arise, between their private interests and their public duties.

Mr. Marten: Is the Prime Minister aware that before Easter I asked the Home Secretary whether he would give an assurance that no Minister would be taking part in the Campaign for Nuclear Disarmament march, and that the right hon. and learned Gentleman said that he could give no such assurance? Is he further aware that another of his junior Ministers took part in the demonstration outside South Africa House? Would it not be more becoming to Her Majesty's Ministers if the Prime Minister could give


an assurance that they would not take part in these demonstrations?

The Prime Minister: The hon. Gentleman's question to my right hon. and learned Friend arose out of a main Question dealing with police arrangements. I hope that the hon. Gentleman does not suggest that it is the duty of the Home Secretary to order his police arrangements in such a way as to inquire into the intentions of Ministers in carrying out the requirements of the statement I have made—[HON. MEMBERS: "Answer the Question."]—The first half of the question related to the hon. Member's supplementary question of 25th March. I had to make clear the circumstances in which that question was put, for the benefit of hon. Members who may not recall the precise supplementary question.
The general position of Ministers, junior or senior, is as I have said. There is this general rule about no conflict between private interests and public duties. That rule is being followed. If the hon. Member has any idea where he thinks that it is not being followed, perhaps he will bring it to my attention, and I will look into it.

Mr. Emrys Hughes: Is my right hon. Friend aware that these marches are about the healthiest form of political activity in which Members of Parliament can take part in these days? Will he use his influence on the Leader of the Opposition to lead a "Hands off Steel" march from London to Ebbw Vale?

The Prime Minister: I am not sure that the right hon. Gentleman would like to vacate his seat for so long. It is not for me to give advice to my hon. Friend on the question of marching and exercise, but I should like to say to the hon. Member for Banbury (Mr. Marten)—and we share his regret at having been frogmarched from the Front Bench to the back benches—that he could, perhaps, show his enthusiasm in some suitable case involving human liberty by himself joining in one of these demonstrations.

Mr. Ramsden: Does it not constitute something of a record for the Government to have got both the nuclear disarmament people and the aircraft workers out on the march this year?

NORTHERN IRELAND (REPRESENTATION)

Mr. Hamling: asked the Prime Minister if he will take steps to amend the House of Commons (Redistribution of Seats) Act, 1949, with respect to the representation of Northern Ireland in the House of Commons.

The Prime Minister: No, Sir. The Government have no such plans.

Mr. Hamling: Is not my right hon. Friend aware that his remarks in his recent speech excited some expectation on these benches that we might have some reform of the abuses of the constitution in Northern Ireland?

The Prime Minister: I cannot find any record in any speech I have made that would have given rise to those particular expectations. I am quite certain that any changes at any time in our constitution are matters which would duly have to be put before the electorate, and then to some future Parliament. We have certainly no such plans on this. I am sure the House will agree that there is an apparent lack of logic, for example, about steel, when Northern Ireland can, and presumably will, swell the Tory ranks tonight, when we have no power to vote on questions about steel in Northern Ireland, as the Bill cannot extend to Northern Ireland because of the fact that the Stormont Parliament has concurrent jurisdiction in these matters.

Sir Alec Douglas-Home: Does the Prime Minister recall that on 28th October, 1948, Mr. Attlee gave a pledge to the House on behalf of the Government that no change would be made in the constitutional status of Northern Ireland without Northern Ireland's free argreement? Will he confirm that he supports that pledge in regard to these arrangements?

The Prime Minister: I was certainly a member of the Cabinet that made that pledge. I stand by that pledge. The right hon. Gentleman might start, on matters of taste, to look at the question of why he gets the support of his hon. Friends beside him—for example, on matters affecting housing discrimination in London—when we English, Scottish and


Welsh Members cannot express our views about housing conditions in Belfast.

Sir Alec Douglas-Home: Would the Prime Minister answer my question? What I asked was whether, on behalf of his party, he supports the pledge given by Mr. Attlee, as he then was, when he was Prime Minister?

The Prime Minister: The right hon. Gentleman was obviously so deafened by the concourse of candidates round him that he did not hear the answer I gave. He will find it in HANSARD tomorrow, but, just to help him, in case they do not give him HANSARD to read, I will say it again, and perhaps he will listen this time. [Interruption.] I will give the answer again, if hon. Members want to hear it a second time. I said that I was a member of the Government that gave that pledge, and I said that I accepted that pledge on behalf of the Government. I said that last time. I do not know why the right hon. Gentleman gets up and wastes time asking for a repetition.

Mr. Shinwell: Is my right hon. Friend aware that there are many on this side of the House, and many whom we represent outside the House, who are of the opinion that, as Ulster has an autonomous and separate Parliament, there is no reason why it should send representatives here?

The Prime Minister: I have already drawn attention to the anomalous situation. The House has no jurisdiction over large matters, including two Measures coming before the House this week, so far as Northern Ireland is concerned. I would hope that Northern Ireland Members, who are here, and who are welcomed here, for the duties they have to perform on behalf of the United Kingdom in many matters affecting Northern Ireland, would consider their position in matters where we have no equivalent right in Northern Ireland.

Captain Orr: Would the Prime Minister at least repudiate the suggestion made by his right hon. Friend the Member for Easington (Mr. Shinwell) that a people who are taxed at the same level as anybody else in the United Kingdom should not have the right to send representatives to this House and deal with all matters which affect public expenditure? Is it not in fact now the case that, since the electorate has risen in Northern Ireland so

very largely since 1920, there is a very good ease for three or four more Members—[Interruption.]

The Prime Minister: The hon. and gallant Gentleman and his hon. Friends are rather making the case against that sort of extension. It is certainly the case that Northern Ireland Members have great duties to perform here in the sense of foreign affairs, defence, and matters affecting Northern Ireland, including taxation and expenditure. What was not envisaged, I am sure, in 1920 was that those who came here with that responsibility for representing Northern Ireland interests should just become hacks supporting the English Tory Party.

Several Hon. Members: rose

Mr. Speaker: I was calling the right hon. Gentleman the Leader of the Opposition, but there was too much noise to allow me to complete what I was saying—"for the Business Question."

Mr. McMaster: On a point of order. In view of the unsatisfactory nature of the replies from the Prime Minister, I beg to give notice that I shall raise this matter on the Adjournment.

BUSINESS OF THE HOUSE

Sir Alec Douglas-Home: May I ask the Leader of the House whether he will state the business of the House for next week?

The Lord President of the Council (Mr. Herbert Bowden): Yes, Sir. The business for next week will be as follows:
MONDAY, 10TH MAY—Second Reading of the Finance (No. 2) Bill.
Remaining stages of the Museum of London Bill [Lords].
TUESDAY, 11TH MAY—Supply [17th Allotted Day]: Committee.
There will be a debate on Rising Prices.
Motion on the Functions of Traffic Wardens Order.
WEDNESDAY,12TH MAY—Lords Amendments to the War Damage Bill.
Remaining stages of the Firearms Bill.
THURSDAY, 13TH MAY—Supply [18th Allotted Day]: Committee.
A debate will take place on Broadcasting.
Motion on the Cinematograph Films (Collection of Levy) (Amendment) Regulations.
FRIDAY, 14TH MAY—Private Members' Motions.
MONDAY, 17TH MAY—The proposed business will be: Finance (No. 2) Bill.
Committee [1st day].

Sir Alec Douglas-Home: The Commonwealth Prime Ministers' conference is to assemble soon after we return from the Whitsun Recess. Could the Government provide time for a debate on Commonwealth affairs before that conference takes place?

Mr. Bowden: I will certainly consider the right hon. Gentleman's request, but he will be aware that between now and Whitsun almost the whole time will be taken up with the Finance Bill.

Sir Alec Douglas-Home: Last year we had, to some advantage, a debate in the House before the Prime Ministers' conference. If the right hon. Gentleman would give this serious consideration, the whole House would be grateful.

Mr. Bowden: I will certainly consider it.

Mr. Grimond: Can the right hon. Gentleman say what form will the debate on broadcasting take?

Mr. Bowden: I cannot say at the moment. The subject has been suggested by the Opposition. It is a Supply day. It is their day. I cannot say at this stage whether it is to be on the Postmaster-General's Vote, or on a Motion.

Mr. Selwyn Lloyd: Will the Leader of the House give us, say, a half day's debate soon on the Second Report from the Select Committee on Procedure on the matter of Question Time, which is of concern to both sides of the House? The Report contained the recommendation that there should be a debate. It actually suggested the terms of a Motion. It would be for the convenience of both sides of the House to have this debate, I suggest for only half a day, at an early date.

Mr. Bowden: I have read the Select Committee's Report. I agree with a great deal of its findings. That is a personal view. I think that it would be of greater advantage to the House if, as soon as possible—it would have to be after Whitsun—we could have a debate on both Reports, with perhaps the proposals which the Government may submit for any changes.
I appreciate that between now and then we have to consider the roster of Questions between Whitsun and the end of July. I think that through the usual channels we could perhaps have another and completely fresh look at this, if that is the wish of the Opposition, but perhaps leave the debate and then we can look at the wider field.

Mr. Selwyn Lloyd: I am all for consultations through the usual channels. I have had some experience of how valuable they can be. However, this is a matter upon which back-bench Members should have an opportunity to express their opinions as well.

Mr. Bowden: I agree absolutely; that is so. However, a roster of Questions cannot be arranged through a debate in the House. It can be done only through the usual channels; and is difficult enough then.
On the question of any changes in procedure which may arise out of the Report of the Select Committee, I feel that it can best be dealt with by a debate in which the Government bring forward some proposals, and I would propose to do this as soon as possible after Whitsun.

Mr. Steele: As this was a question that I had intended to put, may I, from this side of the House, say that the House itself was anxious that the Select Committee should report quickly upon the matter of Questions. We are anxious to have some remedy. Surely my right hon. Friend the Leader of the House should give the House either an opportunity to debate the matter quickly, or bring forward proposals himself.

Mr. Bowden: I can only repeat what I have already said. If it is the general wish of the House—this can be conveyed through the usual channels—I can alter the roster between Whitsun and the end of July; but as for a general change in our procedure, on Questions or on


anything else, it had better await the proposals of the Government and the full debate.

Mr. Kershaw: Is the right hon. Gentleman aware that there will be general disappointment that there will not be time next week for a debate on housing n Gloucestershire? Will he make sure that when a debate arises hon. Members representing Wales and Scotland, as well as Northern Ireland, are not allowed to come in?

Mr. Warbey: My right hon. Friend will be aware that his right hon. Friend the Foreign Secretary undertook to consult him about making a further statement on the situation in the Dominican Republic. Can my right hon. Friend say when that statement is to be made and whether we shall have an opportunity of debating it and indicating our opposition to the action of the American Government in disguising an act of aggression under an implausible pretext?

Mr. Bowden: There are two Questions down which we have not yet reached and perhaps it would be a good idea to see the Written Answers tomorrow morning. My right hon. Friend the Foreign Secretary has made a statement within the last few days. If necessary, he will make a further statement. I will consult him.

Mr. Selwyn Lloyd: I apologise for returning to this matter of the Second Report of the Select Committee on Procedure, but this is not a question of the roster. As the Committee's Report points out, there are matters of restricting the length of Questions and Answers, and the rules of order relating to supplementary questions and the automatic right to ask supplementary questions. These are matters for the whole House and not for the usual channels. I beg the right hon. Gentleman to reconsider this point.

Mr. Bowden: I accept exactly what the right hon. and learned Gentleman has said. This is a matter for the whole House and I promise that the whole House shall consider any proposals arising from the Committee's Report or any that the Government bring in. We cannot possibly do this before Whitsun, but in the general interest of the House, if hon. Members want to alter the pro-

cedure of the roster, we can perhaps do it as an interim measure.

Mr. William Hamilton: Would my right hon. Friend consider the possibility of debating this subject one morning? We have already established the principle of morning sittings. [HON. MEMBERS: "Friday morning."] On Wednesday's business, is my right hon. Friend satisfied that we shall have enough time to discuss the Lords' Amendments to the War Damage Bill, in view of the fact that several of my hon. Friends now express great interest in these matters and there are many Burmah Oil shareholders in the House who, I am certain, would want to declare their interest in view of what happened in another place when the matter was debated there?

Mr. Bowden: I have placed the Lords' Amendments to the War Damage Bill as the first Order on Wednesday and I think that there should be adequate time.

Sir Harry Legge-Bourke: Will the Leader of the House give consideration at least before Whitsun to a debate on early day Motion No. 192, which has now been signed by 120 hon. Members on this side of the House?

[That this House, having noted the remarks of the Minister of State for Disarmament in the Disarmament Committee of the United Nations on 28th April, 1965, deplores this further example of the denigration of Great Britain now becoming habitual with Her Majesty's Government.]

In coming to his decision, will the right hon. Gentleman bear in mind that whilst all of us would zealously guard our right to go hammer and tongs at each other on national affairs here at home, it has been the tradition over the years that at international conferences, and so forth, everybody speaks for Britain regardless of what party may be in power at the time and that there is general concern that this principle is being infringed?

Mr. Bowden: That is a very good principle, but there have been many occasions on which it has been infringed in recent years. I do not accept that my noble Friend the Minister of State for Disarmament infringed it. I have reread what he said this morning. What he did was to point out the differences


between us and the former Administration on nuclear policy.

Mr. Allaun: Is my right hon. Friend aware that next Thursday is the date of municipal elections, when many hon. Members on both sides of the House like to attend and feel that it is their duty to attend in their own constituencies? When my right hon. Friend was approached by the Opposition for a Supply day on this occasion, on the subject of broadcasting on which there may be or may not be a vote, was this point borne in mind by both sides, particularly in view of the fact that in previous years it has been fairly customary for there to be non-controversial business on that day?

Mr. Bowden: Whatever may happen about a vote on Thursday is not a matter for me. That is a matter for the decision of the House, but I should have thought that quite possibly—I put it no more strongly—in view of the subject laid down for debate on Thursday it may be regarded as an occasion when a three-line Whip may not be necessary. I do not know. That is a matter for Members of the House and not for the Leader of the House.

Mr. Hooson: May I invite the attention of the right hon. Gentleman to early day Motion No. 180 in favour of a World Security Authority, which is supported by hon. Members of all parties?
[That this House, noting with interest the establishment by the United Nations of a 33-nation committee on peacekeeping, believes that United Nations efforts in this field would be more effective, were they to be within the framework of law enforcement known in advance, and to this end urges Her Majesty's Government to propose in the committee that it supports the creation of a permanent force with an individually recruited personnel owing allegiance direct to the United Nations and paid by it, and whose prime purposes, in areas where it was directed to operate, would be the enforcement of laws, preventing the ownership, use or manufacture of arms or the incitement to such except by consent of the United Nations, or to act to prevent violation of frontiers; and that Her Majesty's Government should announce in advance that if acceptable pro-

posals were to result, it would give its support and supply bases and personnel.]
Can the right hon. Gentleman hold out any hope of a day's or a half-day's debate on this important matter before the Whitsun Recess?

Mr. Bowden: I cannot hold out any hope before the Whitsun Recess. I know that the last opportunity would have been 1st April, which is a rather long way off. I will bear in mind, after Whitsun, the hon. and learned Member's request that a debate should take place.

Mr. Tinn: Will my right hon. Friend consider the suggestion of my hon. Friend the Member for Fife, West (Mr. William Hamilton) that the Second Report of the Select Committee on Procedure might be debated at a morning sitting?

Mr. Bowden: I have already committed myself in the House to saying that there would be no additional morning sittings without the decision of the House.

Mr. Maxwell-Hyslop: Will the Leader of the House be making any revised statement about the business of the House in the coming week consequent upon tonight's vote, either tomorrow morning or on Monday, should the occasion arise?

Mr. Bowden: I have no reason to think that tonight's vote will make the position any different from that of any other night.

Sir A. V. Harvey: Early this week the Foreign Secretary undertook to make a statement on the results of Mr. Gordon Walker's visit to the Far East. Could the right hon. Gentleman see that the House and the public have this statement at an early date?

Mr. Bowden: I will certainly consult my right hon. Friend the Foreign Secretary.

Mr. Blaker: On the question of the Dominican Republic, is the right hon. Gentleman aware that the reply given by the Foreign Secretary last Monday referred to the safety of British subjects whereas what the House would like to hear is a statement of British Government policy towards the situation in


the Dominican Republic? Will the right hon. Gentleman look at this matter again?

Mr. Bowden: Perhaps the hon. Gentleman would like to look at the replies to Questions Nos. 45 and 46 today.

Mr. Maxwell: Will my right hon. Friend be willing to provide time to debate early day Motion No. 200?
[That this House deplores the action of Mr. Justice Stamp in committing a person to prison in private during the week beginning 26th April, 1965, in view of public concern at this flouting of the principles of English justice and the liberty of the subject.]
This relates to the silent disappearance of a person behind bars at the order of a judge of the High Court. In view of the considerable disquiet and unhappiness about this in the House and the country, would my right hon. Friend not consider it a subject for which it would be worth while providing time?

Mr. Bowden: There are Questions down to the Attorney-General for 14th May. I think that we had better await the replies to those Questions before we consider a debate.

Captain Orr: Can the right hon. Gentleman say when we may expect a second debate on Northern Ireland, and whether or not English Members on his side will be encouraged to take part?

Mr. Bowden: The actual dates might be discussed in the normal way through the usual channels. I will do my best to see that some English Members are present.

Mr. Braine: Following the provocative and partisan remarks of the Prime Minister a little while ago on the representation of one part of the United Kingdom in this House, may I ask whether, in view of the fact that there are many English Members representing constituencies of 80,000, 90,000 and even 100,000 electors, the right hon. Gentleman would arrange an early debate to discuss the need for a fairer distribution of seats?

Mr. Bowden: I doubt very much whether a debate at present would be of value, because the Parliamentary Boundary Commission has started work.

Several Hon. Members: Several Hon. Members rose—

Mr. Speaker: Order. We must have regard to other business.

STEEL NATIONALISATION

Mr. Speaker: May I say that neither of the Amendments to the Prime Minister's Motion is selected.

3.50 p.m.

The Minister of Power (Mr. Frederick Lee): I beg to move,
That this House approves the proposals contained in the Statement on Steel Nationalisation (Command Paper No. 2651) as a basis for legislation.
Never before in the whole of our political history has the nation witnessed such a massive campaign as that mounted over the past 10 years by the private steel owners. It has been backed by huge financial expenditure, and its propaganda has been dutifully parroted by the spokesmen of the Tory Party. Among those who know anything at all about steel, it has been the flattest and dampest of squibs.
In the main 30 constituencies where steel is manufactured and, therefore, the voters know far more about steel than the vast majority of shareholders do, the average swing from the Conservatives to Labour was 4·4 per cent—

Sir Peter Roberts: Sir Peter Roberts (Sheffield, Heeley) rose—

Mr. Lee: —or 0·8 per cent. more than the national average. [HON. MEMBERS: "What about the Daily Telegraph"?] I shall come to the Daily Telegraph in a moment.
I understand from the newspapers and the speeches made by hon. Members opposite that the debates on this subject may well be somewhat protracted. Perhaps it would be as well, at the beginning, if we got our terms of reference right. Most organs of publicity for the party opposite, apparently, have quite a lot of difficulty in doing this.
Whatever may be the merits, or lack of them, in arguments about free competitive private enterprise versus public ownership, they have nothing whatever to do with the issue that we are now discussing. Steel is unique among the industries in the private sector in that all political parties agreed with the decision taken over 30 years ago by the Tories, and accepted by the industry, that it cannot

be permitted to function on the classical lines of competitive private enterprise. Since then, there has been no competition. Sir William Firth tried it and found that the condition of obtaining a loan for the development of Richard Thomas was
the working of the plant in co-operation rather than in uneconomic competition".
The White Paper sets out the methods by which the industry has been supervised. During the war, of course, it was under Government supervision. Then came the nationalisation Act of 1949, the application of which was somewhat delayed by the peculiarities of our democratic institutions.
Now that the issue of public ownership is again raised, we see the word "dogma" appearing much in newspapers and speeches. The White Paper itself argues the case for steel nationalisation on purely economic grounds, and, in all the welter of criticism, I have seen no attempt to disprove the economic facts stated in the White Paper. But, if dogma is to be discussed, let us start by discussing what happened in 1951.
On 13th November, 1951, the then Minister of Supply stopped any further action arising from the Act itself, an act under which the vesting date was only on 15th February, less than nine months before. Neither then nor during the passage of the subsequent Act of 1953 was any serious economic argument adduced for getting rid of nationalisation. But that. I suppose, is not dogma.
Two days ago, we had the Third Reading of the Gas Bill, the last Bill which I brought to the House. On Second Reading, on 11th February, the hon. Member for Yeovil (Mr. Peyton) said:
The background to the Bill is one of quite extraordinary and dramatic progress by an industry which, about 10 years ago, many people supposed to be a spent force."—[OFFICIAL REPORT, 11th February, 1965; Vol 706. c. 596.]

Mr. John Peyton: Mr. John Peyton (Yeovil) rose—

Mr. Lee: I shall give way in a moment. Later, the hon. Gentleman interrupted my hon. Friend the Member for Bristol, Central (Mr. Palmer) to say:
I have always said that nationalisation is a bad idea. I still maintain that view. It worsens every problem of management and I condemn it utterly".—[OFFICIAL REPORT, 11th February, 1965; Vol. 706, c. 604.]


Those were the words from an hon. Gentleman who, not many minutes earlier, was speaking about the "quite extraordinary and dramatic progress" made by a nationalised industry.

Mr. Peyton: I have always made clear, first, that we have been fair to the nationalised industries—and I hope that the right hon. Gentleman will copy that example in his treatment of private industry—and, second, that it took a full 10 years before a Conservative Government were able to put these nationalised industries on a proper footing.

Mr. Lee: Perhaps I may continue to show the inconsistency of hon. Members opposite on the question of nationalisation.
A former Minister, the right hon. Member for Sutton Coldfield (Mr. Geoffrey Lloyd), said in the same debate that the Gas Bill
sets the industry up for its new career, a career which results from the wonderful transformation that has taken place in the industry in recent years."—[OFFICIAL REPORT, 11th February, 1965; Vol. 706, c. 608.]
Later, he interrupted my hon. Friend the Member for Norwich, South (Mr. Norwood) to say:
I should not like him to think that there is any difference between my hon. Friend the Member for Yeovil and myself in our detestation of nationalisation."—[OFFICIAL REPORT, 11th February, 1965; Vol. 706, c. 615.]
It seems to me that it is the very success which they are detesting rather than nationalisation itself.
I suppose that the Liberals are free of all taint of dogma. In the same debate, the hon. Member for Bodmin (Mr. Bessell) said:
It will be no surprise to members of the Government to hear me say that the term 'nationalisation' is anathema to me and my party. Certainly, we should not support any further measures of nationalisation, as they are well aware. But this industry has undoubtedly thrived under nationalisation, and I believe that in this case there were strong arguments for putting the industry under public ownership".—[OFFICIAL REPORT, 11th February, 1965, Vol. 706 c. 645.]
Those of us who were Members of the 1945 Parliament will remember that the Gas Bill was more bitterly contested than any other of the nationalisation Measures during the whole of that period. Yet it is we on this side who are charged with

pursuing narrow ideological considerations.
The steel industry is one of those special cases of which a great Liberal, Lord Beveridge said, in his "Full Employment in a Free Society", that the part of the State should be not to try vainly to stop a tendency towards monopoly but to bring it under control, and the simplest way to secure that such a monopoly is conducted in the public interest and not in the interest of a section, is to make it a public service under a public corporation. In those days, Liberalism and Radicalism still had something in common.
Again, in trying to get our terms of reference right and discussing the use of words, I take a further very relevant point. I give hon. Members opposite something to cheer about—old-fashioned nationalisation. This is the jargon used to refer to the nationalisation programme of the Labour Government of 1945–51. It is occasionally used by people who ought to know better. In other words, it is used to describe the approach to a method of ownership of industry which began in 1947, or, in the case of steel, in 1951. It is a term used by people who argue for the retention of a system of ownership of industry which dates back to the first Industrial Revolution in the eighteenth century. That, we suppose, is the new-fashioned method of ownership.
This standing of the English language on its head is done by a formidable volume of brain-washing propaganda, much of it led by the British Iron and Steel Federation. The Nuffield Study of the 1959 General Election showed that private steel spent £556,000 on such propaganda. The study by Butler and King of the 1964 General Election shows that the Federation stepped up its expenditure to £620,000, and the main firms spent a further £638,000. That made a total expenditure of over £1¼ million, or nearly four times the cost of the Labour Party's election campaign.
I do not know whether anyone assumes that the Federation does this because it likes the colour of the right hon. Gentleman's eyes. The fact is that he who pays the piper calls the tune, and it is quite obvious now that the party opposite is merely a tool of such power lobbies. The thought of having to fight elections


without the groundwork having been done by such lobbies must be a frightening thought to right hon. and hon. Members opposite—[Interruption.]—and perhaps it accounts for some of their opposition to our suggestions in the White Paper. [Interruption.] I can wait.

Sir Cyril Osborne: The First Secretary has gone to sleep.

Mr. Lee: In looking at the proposals that we finally enshrined in the White Paper, we consider whether—[Interruption] There is not going to be a lot of debating today if this sort of thing goes on. In considering the schemes which we should put into the White Paper, we tried to study a number of alternatives.

Mr. Michael Foot: On a point of order, Mr. Speaker. Is it your intention in this debate to try to preserve order?

Mr. Speaker: I hope that both sides of the House will allow this matter to be debated properly.—[HON. MEMBERS: "That is not what they want opposite."] That is my wish, and I do not desire my words to be amended. [HON. MEMBERS: "The other side."] One of the rules is that, when the Chair is on its feet, it should be heard in silence. I do not wish to have to take drastic steps about it. I would much rather rely on the good sense of the House.

Mr. Lee: I was saying that in drawing up the White Paper we were considering what alternative plans were possible to remedy the defects of the present system and to secure the best advantages of common ownership. One possibility that was canvassed was to strengthen the Iron and Steel Board. But the present entirely negative powers of the Board would mean that although it could stop developments which it felt to be against the public interest, despite the very able men who have been conducting the Board's affairs, they would never have any positive powers to create the kind of capacity which might well be necessary. We could not find any way in which a Board of this type could exercise public supervision over private interests in a constructive—that is, a positive—as against the entirely negative powers that the Board now has.
A second possibility would be that the National Steel Corporation should acquire 51 per cent. rather than 100 per cent. of the shares of the main steel companies. This is the scheme which has been canvassed by my hon. Friend the Member for Bosworth (Mr. Wyatt). We considered this, but although I agree that it would give the Corporation much influence on the policy of the companies, including the power to appoint and to change directors, it certainly would not give full control to the Corporation.
Directors once appointed are responsible to the whole of their shareholders. The directors of the part-nationalised companies, as they would be, would have an extremely awkward double responsibility to the Corporation, which would be concerned with the most efficient development of the industry as a whole, and to their private shareholders, who would, presumably, be concerned with securing the maximum return on their investments.
I suggest that directors in that position could not properly sacrifice the financial interests of their company to the interests of the industry as a whole—for example,
by accepting that their company should concentrate on the less profitable markets, particularly, at present, the export markets. A 51 per cent. shareholding would not necessarily be sufficient to secure the winding up of any companies or the transfer of their assets, operations which could prove to be essential to the rationalisation of the industry.
Moreover, it is a fundamental principle of our company law that directors, once appointed, are responsible to the shareholders as a whole. This is not a principle to be lightly abandoned and it would not be possible to pass an Act saying that in the steel industry directors should be responsible to only 51 per cent. of their shareholders.

Sir C. Osborne: Surely, this principle works perfectly well in the case of B.P.

Mr. Lee: I should have thought that B.P. was at present the best illustration of what I am saying.
I have been talking about the rationalisation of an industry. B.P. has nothing whatever to do with the rationalisation of an industry. We know that the points which I have been making concerning a


51 per cent. shareholding cover the Liberal suggestions. We reject those suggestions because they would not give us any scope for rationalising the industry.
The country knows the Government's suggestions in the White Paper for meeting the problems revealed in last year's Iron and Steel Board Report and for the far greater problems which the future will bring. This afternoon, we are discussing broadly the suggestions which the Government make for this. None of us, however, knows what is the Tory solution of the problem. I do not know whether the right hon. Member for Enfield, West (Mr. Iain Macleod) announced it the other night when he said that his party would denationalise steel if we succeeded in nationalising it. Is that the answer? Perhaps the Leader of the Opposition will tell us. Has there been agreement on this inside the "Shadow" Cabinet, or are those who comprise it as widely apart on this issue as they are on most other things?
What is clear is that the present position of a virtual private monopoly with a Board which possesses only negative powers has failed. Mr. Judge, the President of the Iron and Steel Federation, has stated:
A decision to defer legislation and undertake an authoritative and speedy review of the industry and its organisation would surely meet with widespread public approval. Such a proposal putting the national need clearly above all sectional interests would bring a wholly co-operative response from this Federation.
I wonder what has delayed it. Why have we not had any approach by the previous Government and the Iron and Steel Federation, who knew precisely the problems which we would face? Why have they had to wait until now, when we come forward with our positive proposals, before we can have any suggestions of the type which is now being made?
I suggested in a speech some time ago that perhaps the industry was not quite as efficient as it ought to be, and I was charged with irresponsibility. Questions were asked in the House. I think that the right hon. Member for Enfield, West was concerned. I do not want to get too far diverted into arguments about lack of responsibility in utterances about the efficiency of British industry, but I would say that of all the statements of that kind that I can find since the war by far the most irresponsible

has been the one by the Leader of the Opposition when, as Prime Minister, he suggested that 10 per cent. of our great industries, in which over a million of our people had invested their lives and in which thousands of millions of pounds of public money had been invested, are "the junkyard of nationalisation".
The hon. Member for Yeovil told us just now that his party gave nationalisation a fair chance. The day when the Tories could argue against nationalisation because of lack of efficiency has gone. [HON. MEMBERS: "Oh."] The nation accepts that a 4 per cent. increase in industrial productivity would put us out of most of our economic troubles. Each of the three nationalised fuel industries passed the 4 per cent. level years ago. Had we got that kind of response from private enterprise, we would be in a far better position than we are today.
As I was saying before I was diverted from my theme, the Iron and Steel Federation is now suggesting an inquiry in the national interest. Why now, after all the years that have been wasted, when it could have produced this kind of structure with the help of the Tory Government? To preserve a structure based on private enterprise and public control the Tories would have to copy that which has been seen in Japan, which now possesses a highly successful and efficient steel industry.
According to an article in The Guardian of 21st April,
the growth of the Japanese steel industry has taken place under a system of free enterprise efficiency combined with almost total Government control … it was the Government that held the whip hand, making the final decisions on expansion and production right down to the individual details for each company".
In other words, if anyone is to try to make a success of that system, this is the only way that it can be done. It amounts to State capitalism, a position in which the Government are by far the senior partner with the industry itself accepting the instructions of the Government.
That is precisely the opposite to what we saw when the Tories were in power. It has produced in Japan, however, a ruthlessly efficient industry, with the Government as the dominant partner. I do not know whether that is what the Tories advocate—perhaps we will hear later from the right hon. Member for


Enfield, West—but certainly, unless they are prepared to do that, there is no future for steel in the set-up of a public board trying to control the activities of a privately-owned industry such as this.
We have, therefore, to look at the efficiency, or the lack of it, which the present set-up has produced. By international standards, the industry's efficiency must be called into question. According to the Federation,
the industry believes that its operating efficiency is high".
That appeared in the pamphlet "Steel—Leave Well Alone". But most of the other major world steel producers have expanded their output per man faster than our steel industry has done.
To quote a few figures, the following show the growth in annual crude steel output per worker from 1954 to 1960: Japan and Italy, 84 per cent.; Canada, 70 per cent.; Holland, 52 per cent.; France, 47 per cent.; Spain, 43 per cent.; Austria, 40½ per cent.; Germany, 36 per cent.; Sweden, 35 per cent.—[Interruption.] I know that hon. Members opposite do not like this, but they must have it. Belgium, 25 per cent.; Luxembourg, 23 per cent.; the United States of America, 22½ per cent.; the United Kingdom, 15 per cent.

Mr. George Y. Mackie: Mr. George Y. Mackie (Caithness and Sutherland)rose—

Mr. Lee: Those figures show what an extremely difficult task right hon. Members opposite have in showing how negative control can produce positive economic planning of this essential industry, which of itself is the genesis of a huge and vital sector of our economy. They have to show how British steel can be rationalised and modernised to meet the challenge of new methods. They have to do this while advocating the retention of the industry in a form which has already failed badly to do it. They have to show how private ownership of steel can finance the industry's next major expansion programme which must come sometime after 1970.
Experience since denationalisation suggests that the necessary expansion of capacity is unlikely to take place without huge injections of public money. The

present arrangements simply do not correspond with the realities of the situation, in which substantial sums of public money have been put into the steel industry to finance extension programmes. Over the past 10 or 15 years, about £400 million of public money in the aggregate has been advanced to the industry.
I want an answer from the right hon. Member for Enfield, West. If the Tories are to retain the present set-up in the steel industry, does he accept, on behalf of his party, that the only way in which the next expansion programme can be financed is a further large input of public money to do it, or have the Tory Party a system, unknown to the rest of us, by which to expand and produce the next important programme and still find the money to finance it internally within the steel industry?
Let us consider the position of new strip capacity. Here the wider national considerations and the need for injecting public funds into the industry are brought together. In its Development Report for 1957, the Iron and Steel Board said:
The Board think there will be a need for a new mill by about 1962".
The industry, however, argued that it would be necessary by the middle of the 1960s. If the strip mills had not been ready until 1965, as the industry had planned, there would have been a further drain in 1963, and 1964, of £50 million on our balance of payments. In view of the very high cost, perhaps £150 million, of the largest new strip units, it is hardly surprising that the industry should take a very cautious attitude about the need for new capacity.
But this caution has been extremely expensive for the nation. Two or three years ago, owing to the reluctance of the industry to expand, capacity in the industry was quite insufficient. As a result, between 1953 and 1960 we had to make good the inadequacy of our production by imports valued at well over £500 million. Incidentally, this turn of events contrasts rather oddly with the promises made by the right hon. Member for Streatham (Mr. Sandys), during his speech on the Second Reading of the Iron and Steel Bill, when he said:
When the companies are returned to private ownership they will of course, have to find finance for themselves …".—[OFFICIAL


REPORT, 25th November, 1952; Vol. 508, c. 278.]
I am sure that he meant that and I am sure that he thought that it was true. It would he interesting to hear his second thoughts on a prophecy of that kind.
But the most important economic argument for nationalisation is that the steel companies are far too small to take advantage of the latest techniques of production and direction, e.g., in the use of computers. We have developed this point in paragraph 13 of the White Paper. To take one example of the inadequacy of the present industry structure—

Mr. John H. Osborn: Mr. John H. Osborn (Sheffield, Hallam) rose

Hon. Members: Give way.

Mr. Lee: It is generally agreed that a good deal of rationalisation is required. I do not believe that there is any opposition to that proposition even on the other side of the House. At Scunthorpe, for instance, there are three major works close together, but under completely separate ownership. On the North-East Coast, we have the same picture and again in South Wales. Common ownership will make it possible to work out the best pattern of organisation without regard to the complications which now arise from company structure at this time.
The question of scale, of size, has been highlighted in recent weeks by a series of statements by the leaders of the European, and particularly the German, industry, of the need for units much bigger than anything we have in this country. These are to be our rivals, the rivals of British steel, in the export markets. At present, the two biggest steel companies in this country are United Steel Companies and R.T.B. with productive capacities of 3·5 million tons and 3·7 million tons respectively.
But in the international industry there are at least 12 companies with a production of more than 4 million tons a year. Our proposals would create a single unit of direction with a capacity of about 30 million tons of crude steel a year. It would be a unit comparable in size with the United States Steel Corporation and able to stand up in competition with the giants which are now likely to appear on the Continent.
I now say a word about exports.

Mr. J. H. Osborn: Mr. J. H. Osborn rose—

Hon. Members: Give way.

Mr. Lee: Hon. Members opposite wasted enough of my time with animal calls a while ago.
The steel industry has to fight increasingly hard for its exports. We have recognised that in the words which we have used in the White Paper. Our complaint is that it is not fighting very successfully and that our share of world trade in steel has been falling steadily for the past 10 years. Indeed, in value terms the so-called record exports of 1964 were worth less than in either 1960 or 1957. Most serious of all, the Iron and Steel Board and the British Iron and Steel Federation expect no increase in exports between 1964 and 1970.
Of course, we recognise that it is not easy to increase exports, but countries with dynamic steel industries have been able to overcome the difficulty of finding export markets. Between 1954 and 1963, Japan increased her tonnage of iron and steel exports by 375 per cent.; Sweden by 344 per cent.; and Austria by 172 per cent. The increase by the British industry was 73 per cent. This contrasts very much with the Federation's boast that
One test of the comparative efficiencies of the major steel industries is provided by the extent to which they have succeeded of late in increasing their export sales.
That is in "Steel—the Facts".
The truth is that the British industry's attitude is exemplified by its repeated demands for a world steel conference—and the Liberals have fallen rather badly for that—which would be concerned not with providing new export possibilities, but with regulating international trade in the interests of a protected market.
The crucial test of our proposals is whether they are well designed to meet the challenge of the future to which I have been referring. In formulating these proposals, we have aimed at bringing into the public sector those companies which form the main part of the steel industry and whose activities can advantageously be planned as a whole. But we have left in the private sector the smaller specialist units many of which straddle the borderline between the steel industry and the engineering industries and which


do not need to be integrated into the main part of the steel industry.
I shall say more later about the private sector. For the moment I will say only that it will be strong enough—and this should appeal to the Liberals—to promote competition between it and the nationalised sector, a stimulus to efficiency in both, for the first time in over 30 years.
Nationalisation will cover the 14 major groups which directly or indirectly own all the integrated works. They control between 90 and 100 per cent. of our capacity to produce pig iron, crude steel and the heavy products. They also control more than 70 per cent. of capacity to produce alloy steels, which are of high value and rapidly increasing importance. They own all the main works on the north-east Coast, in South Wales and in the Scunthorpe area and a high proportion of the plant classified by the Iron and Steel Board as obsolescent.
The proposed method of nationalisation is by acquisition of securities. This means that the nationalised companies will be taken over as going concerns. There will be no sudden break in the management of the companies and the contacts and names will be kept, at least during the initial period. This method means also that the National Steel Corporation will acquire the diversified interests of the big steel companies, particularly those of the Dorman Long group in bridge building and structural engineering and of Lancashire Steel in the wire industry.
These diversified interests were acquired for sound economic reasons. They will give the National Steel Corporation a good basis for further diversification if this proves desirable in the light of development. But any major expansion of the diversified activities of the nationalised industry will be subject to the Minister's consent.
I now turn to organisation. Initially, the National Steel Corporation will be in the position of a holding company. But it is important that the central board should be able to exercise central control. At the same time, there must be no loss of initiative and responsibility in subordinate units. We think that it would be wrong to lay

down in legislation a rigid sub-structure of organisation which would have to be worked out before the Corporation had any chance to advise and which would be quite inflexible and prevent the Corporation from experimenting with its organisation. But it is too important a question to be left to the Corporation alone. The Minister and Parliament must have a full say. The Government's proposals are designed to combine flexibility with effective Ministerial and Parliamentary control. The Corporation will be required to submit reports to the Minister, the first of which would have to be made within 12 months of vesting day.
I want now to deal with other aspects of the Government's proposals. First, hybridity. I gather from the newspapers that, in the opinion of the right hon. Gentleman the Member for Enfield, West, the most eminent of our present day authorities on such uncomplicated issues as hybridity happens to be the present editor of the Spectator. If either Erskine May, or the authorities of the House, beg to differ from him, so much the worse for their reputations.
As long ago as February last, speaking with all the authority of his self-confessed infallibility, and enjoying all the advantages of ignorance of the contents of the Bill, the right hon. Gentleman was good enough to inform us that it is a hybrid measure. Naturally, we accord to his opinions the importance which we think they deserve.
Having disposed of the more elementary side of parliamentary procedure, he went on to inform us that when a Government have a majority of three, they are not entitled to use the Guillotine to carry controversial legislation. He ought not to leave future Governments and Parliaments in an agony of uncertainty—after all, his peculiar type of genius may not flower again for their convenience. He may, therefore, care to inform us exactly what the majority must be before a Government can avail themselves of the rules governing our procedures. For it follows that if a majority—even of one—wishes to use such procedures, and cannot, the minority is functioning as a majority.
The right hon. Gentleman's blinding logic seems to have landed him in the


same position as the anarchists, who, by a majority decision, passed a resolution asserting that majorities are always wrong. In any event, it is difficult to understand why, if he is so sure that the Bill will be hybrid, he should be concerning himself about the Guillotine—or a Committee upstairs.
The right hon. Gentleman has, on a number of occasions, suggested that there has been no real consultation between the British Iron and Steel Federation and myself. It is an accusation which I certainly could not make against him. What are the facts? I myself have had meetings with representatives of the T.U.C., the British Employers' Confederation, the F.B.I., the National Association of British Manufacturers, the Iron and Steel Board and, of course, the British Iron and Steel Federation.
With the publication of the White Paper I offered these organisations the chance of further discussions. I am glad to say that the F.B.I. has already said that it would like to discuss the details of the White Paper with me in due course. Also, my officials have had meetings with representatives of no fewer than eight other organisations, and both I and my officials have had useful consultations with a number of individual companies.
The right hon. Gentleman seems to suggest that unless I meet them probably every week, and listen closely to their reasons why the industry should not be nationalised, I was not having consultation with them and did not understand their case. To suggest that neither myself nor any other person living in Britain has managed to avoid knowing the Federation's policy is to assert that £2 million of Tory propaganda has been spent in vain. If so, it has been the most strident and expensive cacophony in all political history. If I am wrong about that, and there are such ill-informed people, the right hon. Gentleman will shortly be stating it yet again for the rest of us. The right hon. Gentleman can proclaim, in the words of Mark Antony, "I tell you that which you yourselves do know".
I should now like to say a few words about compensation. Compensation for quoted securities will be based on average Stock Exchange values over alternative

periods, using whichever period gives the higher valuation. The longer period is the 61 months between the 1959 and 1964 General Elections. This includes not only the turns of the industry's trade cycle, but also covers the movements in opinion about the prospects of renationalisation.
The shorter period is the six months leading up to the last General Election, when certain securities made a better showing than over the longer period. The value of unquoted securities is to be settled by agreement with the representative of the holders, or failing agreement by arbitration; the basis is to be the value they would have had, if they had been quoted. The Government's proposals on compensation were arrived at only after careful and exhaustive consideration of many possible bases, denationalisation price plus subsequent investment, balance-sheet values, capitalised earnings, and Stock Exchange values. In arriving at their proposals the Government had in mind three points. First, that the basis should be objective, clear and expeditious. Secondly, that the terms should be recognisably fair as between the community and the share-holders in the light of all the circumstances. Thirdly, that our actions should accord with recognised international standards which require that compensation should be prompt, adequate and effective.
Arguments that the compensation is too low come almost exclusively from highly-interested quarters. I would remind them of the terms on which private enterprise bought back the industry on denationalisation; the terms on which subsequent capital has been raised; and the high yield which holders generally have enjoyed in the intervening period. Some may think the terms are overgenerous. Certainly, they are neither mean nor vindictive. Allied to the compensation provisions are the proposed safeguarding provisions set out in Annex C to the White Paper. These provisions will not be invoked against transactions entered into in good faith and in the normal course of business. But if we find that a new device has been employed to frustrate the manifest objectives of the nationalisation measure, we will, if necessary, introduce further provisions to deal effectively with it.
May I say a word about the Federation? As stated in the White Paper, and under the proposals in the legislation, the Federation will remain in existence. We are conscious of the unfortunate incidents which took place on the last occasion that steel was nationalised. In that period the Federation was not exactly bubbling over with enthusiasm to assist the nationalised Corporation. We will give an adequate period for the transfer of the services of the Federation to the nationalised Corporation.
We invite the Federation—and we hope that it will accept the invitation—to transfer these services to the Corporation, for the Corporation will then consist of most of the units which finance the Federation, and we want a fair transfer of the assets to the Corporation. If, after a period has elapsed, it becomes obvious that there will not be this transfer, the Government will take action. We will legislate to take over the Federation's functions so that the Corporation is not hamstrung in the supplies of ore or in the services that it requires to function as a Corporation should.
I have tried to outline the reasons for the White Paper. I have stated that the reasons are based purely on economic facts. I defy contradiction when I say that no alternative has been put forward by hon. Members opposite. Given the facts as we have put them, given the facts as disclosed by the Iron and Steel Board's Report, given the facts of integrated plant in the future, and given the facts about our failure to increase exports, I ask the right hon. Member for Enfield, West to tell us what is the policy of the Tory Party to meet this problem.
We are in a period in which we must expect large integrated plants to be the order of the day. They bring with them enormous economic power to those who possess them. I do not believe that we look upon our democracy as something which rests merely on the universal franchise and the ballot box. Under our constitution, there can never have been in this country a Government with sufficient power to be able to offset the things which these great private monopolies may wish to do. I believe that if we are to progress with our democratic institutions, it is vitally important that these great power blocs should be brought within

the confines of the national economy. [Laughter.] The cynicism of right hon. and hon. Members opposite will not offset this.
I have said that wherever people understand the steel industry they have turned more and more against the Conservative Party and towards us. I invite the nation to look, not merely at phoney Gallup polls in the Daily Telegraph, or wherever they may be, but at the economic factors which alone will allow Britain to plan its economy and to make great headway in the world of tomorrow.
For these reasons, I ask the House to accept the conclusions of the White Paper.

4.44 p.m.

Mr. Iain Macleod: The intention to take early action to reestablish public ownership and control of the iron and steel industry was in the Gracious Speech at the beginning of November. The only other time when a similar note of urgency was struck in that Gracious Speech was in connection with the promise to establish a Crown Lands Commission as rapidly as possible. Neither Bill has yet appeared. That was November.
On 8th January, the First Secretary of State will remember that he promised—he was visiting Austria at the time—action during the following few weeks. In February, the Minister found it necessary to deny rumours that the Bill was being postponed; but nothing happened in February. In March, the Minister ran out of excuses, because one day—it never having been suggested that we should have a White Paper—suddenly news about the White Paper appeared.

Mr. Archie Manuel: The right hon. Gentleman does not like it.

Mr. Macleod: I do not like it at all.
Publication of the White Paper slipped from before Easter until after Easter. Finally, it was published on the last day of April. The reason why it was left so late was to take up as much time as possible and yet to make sure that the debate on it took place on the day of voting in the Birmingham, Hall Green by-election. The House has been treated with the maximum amount of discourtesy. The reason which was given


was that it was necessary for the Stock Exchange to have the weekend to mull over the compensation terms—an argument, if it is an argument for anything, for having Budgets on Saturday mornings. The Bill is still over the horizon.
The Minister referred at one point to eyes. In fact, I have broken a blood vessel in my left eye. I think it happened when I read the White Paper. So if I peer a little more closely at my notes I hope that hon. Members opposite will forgive me.
The key sentence in the White Paper—and it is really astounding that the Minister made no reference to it—is at the top of page 8:
The industry is dominated by a small number of very large groups, each of which produced more than 475,000 tons of crude steel in the 12 months July 1963 to June 1964.
Why 475,000 tons?

Mr. Lee: Why not?

Mr. Macleod: What is the reason for choosing this particular period? The natural period would either be the calendar year or the accounting year, which normally ends in September. The Minister did not give the reason, but I will.
We have always known that the firms which the right hon. Gentleman wanted to take were those listed in paragraph 17 of the White Paper—just those and no more. He did not want, in particular, the somewhat older plant of the Duport group. I have figures for each of the six possible periods from December, 1963, to March, 1965, inclusive for the English Steel Corporation, the Duport Group and Round Oak. The only one of the six which enables the Minister to take into public ownership Round Oak and English Steel and to leave out Duport is the one which he has taken. I do not think that the Minister has quite realised the significance of this point.
First, the criterion which the right hon. Gentleman has adopted is artificial and indefensible. It is not the ordinary period. Also, he has not taken a round figure like 1½ million tons. This raises and will raise—I am glad that the Minister referred to this—questions about the status of any Bill produced

from these proposals. Let us be clear. The Minister will agree with me that the question of hybridity is neither for him nor me to decide. We can make submissions, and that is the point. In due course, as was done before, the Chair will rule.
Sir David Maxwell Fyfe made a submission to Mr. Speaker Clifton Brown on 15th November, 1948. I give, very briefly, three simple reasons why, in my view, the situation has changed as a result of the proposals in the White Paper. First, at that time virtually all the companies were taken into public ownership. Now, 14 are to be taken in, and 210 are to be left out. Clearly, there is a difference of treatment there.
Secondly, last time all subsidiaries were taken over, but now there has been selection, and selection between the companies, in that companies like Dorman, Long are treated differently from companies like Tube Investments. Thirdly, as I have shown, the tonnage and the period taken are selective, and were drawn deliberately to affect sometimes favourably and sometimes unfavourably the position of individual companies.
Finally, the question of hybridity does not affect the proposals in the White Paper, nor does it affect our opposition today, but for more than 500 years the House of Commons, in certain circumstances, has offered the right of individual presentation of a case to individuals and to companies.
Both sides have, quite naturally, taken legal advice on this matter. Presumably, the Government believe that they have found a way round it. In my view, we cannot, just by a drafting formula, evade the plain intention of Parliament. The only Way in which this can be done is by altering, after due consideration, the Standing Orders of the House. It cannot be done in any other way, and until then all citizens and corporations alike are entitled to their right of individual protection.
At the briefing conference held at Transport House, when the Prime Minister was introducing the manifesto proposals for the last election, he said:
When we say steel, we mean steel".
But the White Paper, of course, goes far beyond that. It is proposed to acquire 40 per cent. of the structural steel


engineering industry, and I cannot think that the remaining 60 per cent., who are from now on, or will be, at the mercy of the State Corporation which will produce the whole of the country's structural steel output, are particularly happy at that prospect.
But it goes far beyond that, too. In particular, it is proposed to take over the chemical plants of the iron and steel companies which distil tar and refine crude benzol. At present, 45 per cent. of the country's refined benzine comes from these plants, and it is used in the production of, among other things, nylon stockings. Under nationalisation the State will acquire the steel industry's chemical works. The only other sources are the National Coal Board and the Gas Council, so the State will have a complete monopoly—"when we say steel we mean stockings".

Dr. Jeremy Bray: Dr. Jeremy Bray (Middlesbrough, West) rose—

Mr. Macleod: There are two infinitely—

Dr. Bray: Will the right hon. Gentleman give way?

Mr. Deputy-Speaker: Order. If the right hon. Gentleman does not give way, the hon. Member must resume his seat.

Dr. Bray: The Federation must have misinformed the right hon. Gentleman, because it is cyclohexane which is used in the manufacture of nylons.

Mr. Macleod: Not according to my information, but the hon. Gentleman knows a good deal more about this subject than I do.
There are two infinitely dangerous loopholes in the White Paper, and I invite the House to consider them. There is, first, the matter of paragraphs 27 to 29 in relation to diversification, which open up so wide a field that the only safeguard—and this cannot be one in which we have any confidence—is the consent of the Minister himself.
I ask the First Secretary of State, who, I understand, is to reply to the debate, to deal particularly with this point. Where does Parliament come into this? Is it proposed that there should be an Order for such diversification? Is it proposed that there should be a Bill? Or is it to

be on the simple ipse dixit of the Minister? The possibilities which these three paragraphs open, and which the First Secretary will recognise, are very wide indeed.
Secondly, there is the question of the private sector. Paragraph 37 of the White Paper says:
The Government regard it as important that the private sector should have a healthy and efficient life of its own …
but it does not seem to me that that is to be possible, with the reserve powers which the Minister is taking to himself. I suspect that at every stage there will be discrimination against the private sector under these proposals. It has been made clear that that is in accordance with the Minister's prejudices.
When we debated this matter last on 9th November, the Minister will remember that I raised specific points with him about the question of the mixed companies, and he said:
… I undertake"—
it was almost the only undertaking that he gave—
that as soon as it is possible to clear up this point I shall do so, either in a statement in the House, or elsewhere"—[OFFICIAL REPORT, 9th November 1964; Vol. 701, c. 675.]
He has not been able to do that yet, and again I ask the First Secretary, because there are many unresolved problems, to deal with that tonight.
If I can put one particular example to him now, he will have plenty of time to get an answer to it. The first automatic stainless steel plate mill in the world is 50 per cent. owned by the English Steel Corporation, which will be nationalised, and 50 per cent. owned by Thomas Firth & John Brown, which will not. As I read the Companies Act, that does not mean that it will necessarily come under the provisions of the White Paper, but I ask the First Secretary to clear up that point and also to tell us how long we are to have to wait before we get an answer to the problem of the overseas subsidiaries, which is worrying many people.
I do not propose to deal at any length with compensation. The Minister mentioned four possible courses. There is, of course, a fifth, that of arbitration. It may be that the Government have chosen the cheapest of the possible methods. I think that that is probably so. I think


that most of the others would have resulted in a considerably higher figure.
Ownership in the steel companies is very widely spread. The average shareholding is £885, and 92 per cent. of the holders own less than 1,000 shares. The point that I want to make here, and return to later in my speech, is the utterly muddled sense of priorities, which will have repercussions for the entire social and other programmes of the Government, that is shown by these proposals.
For all its dislike of these proposals, the steel industry started off with the best of intentions towards the Minister, and in relation to consultation. It is the Minister who has failed the industry. He did this by treating the industry so shabbily that consultation became a farce, and he knows it. He did it by one speech, indeed mainly by one word, on Tuesday, 16th February, when he said:
Public ownership of the main part of steel is the only effective way of getting the industry off the sick list.
I cannot see why he does not take some pride in the achievements of an industry for which he has a good deal of responsibility. Is it not a fact that in 1964 output was at a record level at 26·2 million tons? Is it not a fact that that record has been broken over and over again in the weeks and months of 1965, and that the industry has touched on a rate of 30 million tons? Is it not true that productivity has reached record levels and was up by 9½ per cent. in 1964?
Is it not true, on the question of capacity, that paragraph 110 of the Iron and Steel Board Report states that on the basis of alternative assumptions of a 3 per cent. and a 4 per cent. growth in 1970 crude steel requirements will be 27 million and 30 million ingot tons respectively? Is it not true that the expected capacity is 34 million tons, which will fully provide for capacity and also enable obsolete capacity to be replaced?
In the face of these figures, how can the Minister describe the industry as a sick one? Why did not he, with his experience at the Ministry of Labour—an experience that I have also had; we are both proud of it—make no reference to what the industry has done? The research figure is now a record. The targets set before 1950 will be reached. The British

Iron and Steel Federation last year won the Royal Society for the Prevention of Accidents' trophy for the most outstanding contribution to the prevention of accidents. Why does not the Minister applaud the industry's splendid performance in management training, and training at all levels?

Mr. Michael Foot: The right hon. Gentleman has quoted record figures for exports and production in the steel industry. Can he say whether those figures include the contribution made by the nationalised section of the industry? If so, will he explain why we should give credit to private enterprise for this, when the private steel masters opposed the establishment of the last and biggest steel works in the country?

Mr. Macleod: Of course my figures include the contribution from Richard Thomas and Baldwins—and we wish that it was a more profitable contribution.
I will take up directly the question of Colvilles, to which the right hon. Gentleman referred. All that he has succeeded in pointing out is that in present circumstances it is possible for the Cabinet to take a decision in respect of a private enterprise firm—as the Conservative Cabinet did about Ravenscraig—and to lend it £50 million at fully commercial rates. This can be done without nationalisation and without any alteration in the existing method.
Why does not the Minister also tell us, when he tells us what is wrong, that we are leading the world in the treatment of iron ore for blast furnaces, in the application of the oxygen process to open hearth furnaces, and also in continuous casting? [HON. MEMBERS: "Richard Thomas and Baldwins".] No, it is John Summers. We also lead the world in the use of on-line computers.

Mr. Robert Maxwell: On a point of order. Is it not a fact that the oxygen process—[Interruption.]

Mr. Deputy-Speaker (Dr. Horace King): Order. I am being addressed on a point of order. I must hear it.

Mr. Maxwell: The point that I am trying to make, Mr. Deputy-Speaker, is that the right hon. Gentleman claimed the credit for this country for the oxygen—[Interruption.]

Mr. Deputy-Speaker: Order. I have heard enough from the hon. Member for Buckingham (Mr. Maxwell) to know that that is not a point of order. I understand that this is a somewhat important debate. I hope that hon. Members will listen to the argument on both sides.

Mr. Macleod: I am glad that this point has been raised. It is true that it was in Austria—where the industry is State-owned—that the oxygen process was invented, but if this is a criticism of private enterprise in this country it is equally a criticism of America, Japan, Russia, or anywhere else. The hon. Member cannot have listened to what I said. If he studies my words in HANSARD he will realise that I said that we lead the world in the application of the oxygen process. I did not say that it was invented here; I was referring to its application to the open hearth furnace. That is a statement of fact.

Several Hon. Members: Several Hon. Members rose—

Mr. Macleod: I will give way later. I have already given way more often than the Minister did.
The Minister has made no serious case against the industry in the White Paper. If he could have done so he would have. What he does produce is a reliance on the virtues of nationalisation and some rather vague remarks on size and other matters with which I want to deal.
I hope that the Minister has studied today's excellent article headed, "Does Efficiency Come From Size?" by Geoffrey Owen, the Industrial Editor of the Financial Times.
It disposes largely of the case that the Minister made about the value of size. I will read the last paragraph from the article. It says:
If the Government really wants to encourage an efficient and dynamic steel industry it would do well to rely less on doctrine and more on factual analysis.
It is very easy to exaggerate the relative difference in size of the giant companies in America and elsewhere.
I have figures here in respect of plants of 2 million tons and 3 million tons. Dealing with the 2 million ton plants, there are the great giants in America, naturally, but there is a vastly greater market. In America, there are eight, which produce

75 per cent. of the national output. In this country there are seven, which produce 70 per cent., which is not very different, considering the difference in the size of the countries. In West Germany, there are seven; in Japan, five, and in France, four. Therefore, on the size argument, we are much better than the Minister admitted at any time in his speech. If size is really of any particular relevance in this matter, why break up Tube Investments, Vickers, and Guest, Keen and Nettlefolds. If horizontal integration is good, does it necessarily follow that vertical integration is bad?
There is one point of the greatest importance in respect of which I was not at all content with what the Minister said. It seems to me absolutely vital to preserve the names and the goodwill of our great steel companies. Does the Minister seriously believe that in exports, where the competition is intense, people abroad will be as willing to trade with a State monopoly in this country as they are at present with private firms?

Mr. Lee: The fact is that Richard Thomas and Baldwins, the one nationalised firm, is exporting a bigger percentage than ever.

Mr. Macleod: Of course it is—and it is making a very substantial loss. It is not a monopoly. What is proposed by the Bill, however, is a virtual monopoly of our steel manufactures.
If he is in any doubt as to whether companies will be prepared to deal in this way, let him ask the great steel companies now if they have any evidence of people who would wish to withdraw from their contracts under those circumstances, and I am very certain that he will get a great deal.
On the question of exports, we have some figures from the right hon. Gentleman. I think that he will agree that this is the most difficult field for these proposals; in my view it is. What he must address himself to is that in the free world 92 per cent. of the steel is produced by private enterprise. About 8 per cent. is produced by the State. The onus must be completely on the Minister to show that we should swing our strength from the 92 per cent., which is the rule, to the 8 per cent. which is the exception. If one goes further into that


8 per cent. one sees that there are particular categories. First, those in countries—like India and Egypt—which are developing countries. Obviously, we do not come into that category—a little more from the Socialist Government and we might, but we do not yet.
The second reason is there are in many special cases, hang-overs sometimes, from an earlier régime which explains the State interest. In Italy, for example, where State interest is substantial it is a remnant of the Mussolini period. Salzgitter, in West Germany, was once part of the Hermann Goering combine. On the face of the arguments which we have been given it is frivolous to suggest that our country should stand alone as the one advanced country in the world with a State-controlled iron and steel industry. It is particularly disastrous, as well as irrelevant, because steel, unlike the power industries, is basically a diversified manufacturing industry. It contributes to 56 per cent. of our exports. Whatever arguments there may be for State control in the monopoly power industries they cannot have any relevance to the question of whether the State should stick its claws into steel manufacture.
I will come straight away to the question of money, which was raised by the Minister. If I may refer to the same speech that he made, he said:
The steel owners know very well that even the present industry could not exist were it not for the £400 million of public money poured in during the last 10 years.
The right hon. Gentleman has never been able to explain that figure of £400 million in 10 years and, conveniently, those who have drafted this White Paper have thrown him something of a lifeline, because now this figure of 10 years, which went back to the period after denationalisation, becomes, in paragraph 11,
Over the past 10 to 15 years public money totalling over £400 million in aggregate has been provided …
Even so—[HON. MEMBERS: "That is what he said."] He said for 10 years, and that is the whole point, because this extra five years covers the whole process, and on any calculation I cannot make this figure out.
The Minister is, of course, particularly concerned with the private firms. So far

as I know, since 1953, there have been only two loans to private companies. One was £27 million to the Steel Company of Wales, which has been wholly repaid, and the other was £50 million to Colvilles, which was at full commercial rates of interest. Two parts of the interest has been paid and on one part the company has exercised its rights in exactly the same way as we do with the American loan with a waiver of interest.
The Minister asked: is it possible to raise money? The answer is that of course it is. During these last 18 months Park Gate has been opened, which cost £32 million, Shelton has been opened, which cost £20 million, and Tinsley Park, which cost £20 million, a total of nearly £80 million. There are many other very large plants which are going ahead. If the right hon. Gentleman wants to know whether it is possible to raise even much larger sums for the sort of fully integrated steel plant that he has in mind, it is easy to give him an answer. If the Socialist Government would get off the industry's back all these moneys could very well be found.
Scrappy and inadequate though it is, the Government have made a declaration of intent in their White Paper. It is vital, therefore, that the view of Her Majesty's Government should be clearly stated, and equally important that the view of Her Majesty's Opposition should be clearly stated, which I now propose to do, both in regard to these proposals and in preparation for the time when we shall again form a Government.
First, then, we are wholly opposed to the nationalisation of the iron and steel industry, and if the industry is nationalised we shall denationalise it.

The Chancellor of the Exchequer (Mr. James Callaghan): Including R.T.B.?

Mr. Macleod: Including R.T.B.
Secondly, we believe that this great manufacturing industry is far more efficiently run by private enterprise than it would be by a State corporation. But our approach has always been a positive one. A new situation has been created by the judgment of the Restrictive Practices Court, last summer. We accept that judgment and are glad to note that, in consequence, all the recommendations


to charge common prices have been abandoned.

Mr. Lee: They are still being charged.

Mr. Macleod: No. There have been exceptions. If the Minister would like them, I will provide them.
In the light of that judgment we believe that we should re-examine all the purposes and powers of the Iron and Steel Board, and this we shall do.
Last November, I warned the Minister that this was likely to happen. I said:
… if I am right in thinking that the others …
that is, the other steel agreements would be cancelled—
we shall then have a situation which the Minister would have to consider with the industry and with the Board. He would have to look at the structure of the industry, and, in particular, at the powers of the Board.
I went on to say:
Do we then"—
that is to say, if the Minister ignored the situation, as he has done—
have a year of Parliamentary turmoil, with the wheelchair vote mobilised, and a whole new period of uncertainty in the industry …".—[OFFICIAL REPORT, 9th November, 1964; Vol. 701, c. 673.]
It is exactly that option that the Minister has chosen.
The other possibility was pointed to in my speech of 9th November and it has been pointed to on a number of occasions by the right hon. Member for Vauxhall (Mr. Strauss). There were indications, if I understood rightly what was said by the hon. and learned Member for Montgomery (Mr. Hooson) in a television programme in which I took part, that he, too, was thinking that it was necessary to look at the powers of the Board. If he had one ounce of statesmanship in him, the Minister would have grasped the chance which was offered as a result of these agreements.
If the right hon. Gentleman refers to the presidential address of Mr. Judge, to the British Iron and Steel Federation, he will find that such a method would be acceptable to the industry and, I am sure—[Interruption.] The industry unquestionably preferred the method which was declared last June to be against the public interest. I do not deny that. It

has, correctly, scrapped it and all the other agreements since then.
What we are now to have is a mobilisation of the wheel-chair vote. The Minister began his speech with some reference to the election results last October and he made a passing reference, not, I think, sufficient, to the Gallup poll which we saw in the Press this morning. We have seen also, in Scotland, the beginnings of what will be a tidal wave—[Laughter.]—of Tory successes at the local elections in England and Wales next week.

Mr. Lee: On the point about the Gallup poll. I take the point about the Daily Telegraph Gallup poll. I looked into it. I saw some advice in the Spectator:
Perhaps the safest advice to offer as the flat racing season opens is that trial Gallups are often a poor guide to racecourse performance.

Mr. Macleod: Quite right. What the Gallup poll shows is steadily increasing. Polls are always right about trends, but not necessarily about levels, which is what I said at that time.
The trend has been increasingly against the folly of steel nationalisation. The Minister, who has had these opportunities to get over these difficulties, is a curious sort of Labour Party primitive. He is a political pterodactyl. He is an old-fashioned nationaliser. He believes in this sort of dream world in which nationalisation will put everything right, in which prices will be lower, in which labour relations will be better and everything will be much more efficient. He must be the only person in the country who holds to that image of nationalisation.
I turn to the First Secretary, who is to reply to the debate. I invited him, at the beginning of this Parliament, to take a close personal interest in this matter—I wonder whether I could ask where the Prime Minister is. We are debating a Motion which stands in his name which he has announced as a Motion of confidence in himself and his Government. He ought to do the House the courtesy of being present.
I invited the First Secretary to take a close personal interest in these matters, because I feared the rigid approach—and with good reason—which we would


get and which we have got from the Minister of Power. The Secretary of State for Economic Affairs and First Secretary of State went to Austria. When he was asked whether he had come to get any ideas for the nationalisation of the British steel industry, he replied:
I will not answer that, but two and two sometimes make four.
Not with this Government they do not. They make about 13, from the inflation we have.
The First Secretary has been very busy trying to look after the economic affairs of the country. He thinks that he has had some success. I think that his policy is in ruins. It has been ruined by his brothers and his cousins. The Minister of Technology, the right hon. Gentleman the Member for Nuneaton (Mr. Cousins), took a sadistic delight in twisting the knife in the wound, with his comment about a realistic statement by the unions, to which he once belonged, and, indeed, still does. What I ask the First Secretary to deal with to-night is the question of the priorities which are revealed by these proposals. Are priorities still the religion of Socialism, or are we to put these proposals in front of the social programme, in front of urgent housing, urgent educational needs, help which could be given to Service pensioners and other people?
Do not the Government realise, by what they are doing, how much they are putting back all the other proposals for which they would get much more support?

Mr. Stanley Orme: What did the party opposite do?

Mr. Macleod: We raised all these to record levels all through.
Lastly, the Prime Minister. In his absence—which is in accordance with his usual discourtesy to the House—I ask the First Secretary whether he would convey a brief message to him. If we are to proceed with these proposals which are both old-fashioned and irrelevant, at least could we be spared the Prime Minister's cliché-ridden speeches about modernising Britain? In particular, could we have a little less of the "Dunkirk spirit" in the light of these proposals?
If the right hon. Gentleman knew a little more about military matters, he would use military metaphors a little less. [HON. MEMBERS: "Cheap."] We all have our own memories of Dunkirk. I do not remember battle orders of this sort. The whole point about Dunkirk was that it was a national effort to deal with the challenge of the day. The whole point about these proposals is that they are out of date—they are a generation old—and they will harm the cause of modernisation in this country.
There are two reasons that we have to go through this exercise; because that is what it is. The first is that this has been, for 30 years, part of Labour's official manifesto. The Minister knows this very well. He must have chuckled as he quoted in the White Paper Lord Morrison of Lambeth, when we know, from Lord Morrison's autobiography, and from that of Dalton as well, the struggle which went on in the Cabinet 20 years ago against these proposals. If I am told by the President of the Board of Trade, who has written so eloquently on this subject, that he is wholeheartedly behind the proposal for the old-fashioned nationalisation of the iron and steel industry, I bow respectfully. I have my doubts, which I will keep, if I may, to myself.
The first reason is that it is the old chant of the infantry in the First World War: "We're 'ere because we're 'ere because we're 'ere." Nothing else [HON. MEMBERS: "'Ear, 'ear."] The second—

Mr. Deputy-Speaker: Order. May I remind the Government benches that this is a very serious debate and that noise does not help it at all.

Mr. Macleod: The second reason is simply this. What we are engaged upon, and we know it very well, is an exercise in public relations within the Labour Party. We know perfectly well that hon. Members who are too sick to be out of bed are to be brought here tonight to vote. [Interruption.] We know perfectly well that men and women who have been on their country's and their own business have been brought hack from the other ends of the world. [Interruption.] It is—

Mr. Deputy-Speaker: Order. If right hon. Members on the Government Front Bench wish to intervene I hope that they will do so in the conventional way.

Mr. Macleod: It is at all times the responsibility of the Government for bringing forward the business of the day. It is the responsibility of the Government that makes us take, at such ridiculously short notice, this debate on the White Paper.
The Prime Minister, if he comes through the debate with a majority tonight, will be able to show that he is as equally impervious to good advice as he is to bad. But I tell the First Secretary, in the Prime Minister's absence, that he will not win on this issue, even if he gets a tiny majority tonight, because the country is against him on these proposals. [HON. MEMBERS: "No."] All informed opinion is against him on them. If we had a genuine free vote in the House the proposals would not collect 100 votes.
As we will show in the Division list tonight, we will fight these proposals with our united strength. [Interruption.] If a Bill comes forward we will use every Parliamentary opportunity to try to defeat it and we will take this fight from Westminster to the constituencies. Whenever the Labour Government are ready for a test on this or on any issue then, believe me, so are we—the First Secretary need have no doubt about that—in Parliament, in the constituencies and in the country—and when the General Election comes we shall win.

5.33 p.m.

Mr. G. R. Strauss: I do not think that the vehement speech to which we have just listened—

Mr. Deputy-Speaker: Order. Will hon. Members please leave the Chamber quietly?

Mr. Strauss: I do not think that the vehement speech which has been delivered by the right hon. Member for Enfield, West (Mr. Iain Macleod) impressed any of my hon. Friends. He suggested that the proposals now being put forward by the Government were unnecessary and doctrinaire. In fact, the need for the Government to take drastic action with the steel industry arises from

the doctrinaire and laissez faire attitude of the right hon. Gentleman's party.
It has for long been obvious that the structure of this industry prevents it from functioning to its maximum advantage. Yet the Conservative Party, throughout 13 years of power, did nothing about it. Indeed, Conservative Governments deliberately turned down two specific favourable opportunities for doing so. One was when they set up the Iron and Steel Board in 1953, but refused to give it the effective positive controls essential for the industry's modernisation. The second was when the Iron and Steel Holding and Realisation Agency resold haphazardly the companies it held, instead of grouping them to correspond to a rational shaping of the industry. Those opportunities were thrown away and, because they were lost, the present Government must act.
The industry is now hopelessly fragmented. It screams out for reorganisation, but the necessary changes can only be brought about by a supra-authority, a national body, which can override the vested and sectional interests which dominate the industry today.
The questions which then arise, and which worry many of us, are whether the solution set out in the White Paper is the right one and whether it should be enacted now. These questions must, of course, be considered against the existing economic and political background. The previous Labour Government decided that all-out nationalisation was the proper course to adopt and it fell to me to devise the necessary Bill and pilot it through the House. As hon. Members who were here at the time will remember, this involved many a bloody battle inside the House and outside it with the Iron and Steel Federation. Those battles lasted for about two years before transfer of ownership was accomplished.
Looking at the problem afresh today, and as objectively as I can, 17 years later, I doubt whether, under present conditions, the old orthodox solution of setting up a giant nationally owned monopoly is the best one. One reason is that there has been an important change in the behaviour of the industry during these years. One of the main arguments why we plumped for all-out nationalisation was that the industry was restriction-minded and would not, except under


public ownership, create the capacity to ensure, with a reasonable margin, output sufficient to meet future home and export demands.
For many years past the industry has proved itself to be expansion-minded, and to a remarkable degree. With one exception—when there was a dispute about future consumptive prospects between the Iron and Steel Board and the industry—the Board has had to spend most of its time turning down expansion projects submitted to it by the industry. We know that at present we are assured ample capacity to meet all consumptive requirements at home and abroad until 1970.
Another reason which has affected me is that a publicly-owned monopoly entirely eliminates competition, and whereas this is right in all the present nationalised industries, I now believe that it may have adverse effects in the steel industry. That does not mean that I in any way question the need of the State to command the commanding heights of the economy. I am certain that this is necessary and that this applies especially in the iron and steel industry. However, I believe that the national interest can be equally and, possibly, better served by controlling this commanding height instead of owning it.
Let us be clear about the purpose of national control of this industry, whatever method may be employed to achieve it. Let us, first, dispose of one red herring. We cannot effect the day-to-day operative efficiency of an industry by changing its ownership. Indeed, when we nationalised the industry in 1948 we never advanced that argument in favour of the course we adopted. It is only the experienced managerial and technical staff who can influence the efficiency of a works, its sales organisation, and so on, and they will, I am certain, continue to do that to the best of their ability whoever owns the industry. I have a very high regard for the skill and devotion of these people—indeed, for the industry's operatives generally.
It is a fact that the British steel industry is broadly on a level of efficiency, no better and no worse, with all the other major industries in this country. It is also on approximately the same level of efficiency with the general standard of steel

enterprises abroad. The only sphere in which the British industry falls down is the one touched upon by my right hon. Friend. It is not in the cost of the product which it produces, or the price at which it is sold, but in its productivity, which means the output of metal per man. But do not let us forget that this is largely a manning matter, a question of negotiation between managements and the unions concerned. I do not believe that this could be materially affected by any change of ownership or control.
I submit to the House that the purpose—and it is a highly important purpose—of imposing public control on the industry is to bring about its modernisation. It is no more and no less. That means rationalising its structure and embarking on a long-term development programme which will shape it into a comparatively few large-scale groupings. These groups should be competitive, but subject to overall price control.
I still hold the view, which I expressed in the House in November, that all this could be done under the auspices of a national control body, armed by Parliament with all the necessary authority, which must include the sanction of takeover of any recalcitrant company. That body would itself run the essential services which are now being run by the Iron and Steel Federation. And, incidentally, any public money invested in the industry would be invested only on the issue to the Government of an equivalent amount of equity shares. That is the course we advocated when the loan was made to Colvilles by the previous Government.
I do not propose now to argue my case for this alternative solution. It would take much too long. I will only say that I believe, with my experience, that it is a good one, that it would work and, moreover, that the industry would accept such a solution. It would give to the State all the authority over the industry that the keenest nationaliser could desire and it might dispose once and for all of this perpetual controversy, which is as damaging to the industry as it is distracting to politics.
If the proposals of the White Paper arc embodied in an Act, when could we expect their consequences to materialise?
I do not know what the Government's parliamentary timetable is, but on the basis of what seemed to me to be a realistic calculation—I thought a rather optimistic one—published in The Times on Monday, the take-over date could not be before early 1967. According to the White Paper, the Corporation will then take a year, and I am sure that a year is not too long in drawing up a plan of modernisation. This has then to be considered by the Minister, and after that it can be put into operation.
That is bound to be a slow process, particularly if it involves the building of new gigantic works not yet contemplated. That takes us into the 1970s, and it is not before then that the benefits, that the Government's proposals are designed to bring about, can begin to operate. They cannot possibly have any effect on our current or prospective economic ills, to which they are plainly irrelevant.
I think that we must therefore ask ourselves whether, in allocating our precious parliamentary time, we should give preference to the nationalisation of this industry over the other Measures to which we are committed and which would bring quick and direct returns to the nation—social Measures dealing with land and housing, which the people are eagerly awaiting and for which they primarily elected us. These, surely, are the Measures that should have priority. There can be no question of our defaulting on our determination, which is absolute, to bring this industry under effective national control—this must be a vital ingredient of our long-term national plan to gear our economy to the exacting conditions of the modern world—but, as I see it, no harm could possibly be done if we considered a little longer how best we can do this.
In that consideration, I hope that the possibility will not be dogmatically dismissed of achieving our objective by a measure of co-operation between the State and private enterprise, in which, of course, the State's interests would have to be manifestly paramount. Moreover, the lapse of time for fresh thought would provide the opportunity for the urgent social Measures which Ministers are at present queueing up to present to Parliament.
It would be unreasonable to expect the Government spokesman to agree to such a course during this debate. This would involve a review by the Cabinet of the whole position. But, in the hope that the Cabinet, which has shown itself to be realistic and flexible in facing all the problems that have confronted it, will give this matter further consideration, in spite of the doubts I have expressed I shall vote for the Government's Motion when we divide tonight.

5.48 p.m.

Sir Richard Nugent: I would first congratulate the right hon. Member for Vauxhall (Mr. Strauss) on his very statesmanlike speech. With a great deal of it I agreed. With his general principle, which I think I understood correctly, that it is essential that there should be effective national control of the steel industry but that, in his judgment, it is not necessary for the Government to own the industry in order to control it, I must say that I warmly agreed. The right hon. Gentleman made a most valuable contribution to the debate, and I hope that his right hon. Friends in the Government will listen to what he said, and will be moved to think again on the lines he suggested.
My contribution is made from the point of view of one who served for some years on the Select Committee on Nationalised Industries, and for three years as Chairman of that Committee. The policy of my hon. Friends and myself has throughout been to accept the existing nationalised industries as being the will of the country, and to do everything we could, both in Government and out, to make a success of them. For that reason, in the Reports we made from the Select Committee we took great care to approach the subject completely objectively and impartially. I believe that our Reports were penetrating and constructive, and helpful to the House and to the industry.
We refrained, however, from touching on controversial aspects of nationalisation, because to have opened them would have undoubtedly split the Committee and would have handicapped the nationalised industries in the jobs we were trying to help them to do. But when the Government's proposal comes before the House, a proposal which, in principle, asks the House and the country to


agree to the nationalisation of a new industry—this great steel industry—it reopens the whole great debate on the merits of nationalisation itself. It is on that matter that I wish to make two points. I have had the chance to observe these industries over the years and the opportunity to see how they work. The leaders of these industries are my personal friends and I would be only too glad to help them in any way I could.
The Minister's broad justification for this proposal is that there are serious weaknesses in the steel industry, and that nationalisation would cure them. This simply is not true. Nationalisation is able to bring some benefits of central direction and control, but, inherent in its structure, it has two basic weaknesses to which I want to refer. Over the years, we have made some progress in coping with these problems, but we are very far from overcoming them yet.
First, it is naturally essential that there should be Ministerial responsibility over each nationalised industry. This inevitably reduces the boards' strength and weakens the managements. Secondly, the absence of the profit motive and the discipline of the market undoubtedly deprives the industries of the driving force natural to private industry. Very obviously, some changes must be made but, it is driving force that I regard as basic.
Turning to the first point, the handicap of Ministerial control, the Minister's statutory powers are necessarily large. First of all, the Minister appoints the boards and their chairmen. Secondly, and even more important, he provides the capital—this is crucial in the running of the industries. Thirdly, he settles the form of the accounts. He has other broad powers which I need not now mention. These are very big powers, giving a very large measure of control over these industries.
To be fair to right hon. Members opposite, when they nationalised the existing nationalised industries they made great efforts to give an independent trading right to them, but, in the event, we must all recognise that those attempts have been frustrated, frustrated for a number of reasons—reasons beyond, perhaps, the control of any of us. Nevertheless, the man in the street continues to insist that the Government of the

day, whoever they are, are responsible for each nationalised industry.
If our constituents, on either side, have a complaint to make about a nationalised industry—whether it be coal, rail, air, electricity, or whatever it may be—they make it to us. They make it to individual hon. Members. They expect us to do something about it and, if we do not, they jolly well give us the stick. So what happens is that Questions are put down in a form that gets past the Table, but the supplementary question almost invariably is one about the day-to-day management of the industry. That inevitably means that all the time there is this pressure from the public, through us, to push the Minister to take further control over the trading life of that industry.
This is the basic problem. It is the fault of nobody in particular. It is the product of the structure—

Mr. Ian Mikardo: I am sure the right hon. Gentleman will recall—because he, too, was in the House at the time—that in the period between the end of the war and the nationalisation of the railways, when the Minister was totally responsible we were all able to ask Questions about day-to-day management, and did. Those Questions were barred as soon as the industry was nationalised. In other words, the nationalisation produced a reduction, and not an increase, of public accountability, which is not, I am sure, desirable.

Sir R. Nugent: I quite agree that this is not desirable, but this is a fact. However hard everyone has tried, it has just not been possible to stop this state of things being pushed further, not only in railways, over fares, but in the charges of supply industries, such as electricity, and even in such matters as wage settlements, and so on. All the time there is this pressure on Ministers to take further control.
We got the classic case in the railways over the Beeching Plan, where there was tremendous pressure from hon. Members on both sides whose constituencies were affected by proposed closures and so on, or where there was a threat of railway workshops being closed down and railway-men constituents faced with the loss of


their jobs—pressures coming to this Government now, and previously to our Government, and all having the effect of delaying action by the railways, delaying modernisation and, of course, immensely discouraging management.
Hon. Members do not need to stretch their imaginations to understand how difficult it is for the boards of these industries to take the initiative, to do difficult things and to make big changes when, far from being congratulated for doing so, they get the stick from everyone. Undoubtedly, therefore, in all too many of the boards there is a tendency to be cautious, to be lacking in enterprise, and to wait until they are pushed by the Minister before making badly needed changes.
Private industry managements have practically complete freedom, provided they get a profitable result, and there is no doubt that in the public sector the results reflect these limitations on the freedom of management, combined with the relatively lower salaries paid in nationalised industries. Here, I am glad to say, our Select Committee played some part, by its recommendations, in getting higher scales of salary, which badly needed to be raised.
The combination of a limitation on the freedom of management and the lower salaries undoubtedly make the position of chairmen of boards unattractive to the really top calibre men in industry, and those are the men whom we desperately want to find and put into the lead of these great nationalised industries.
In industry today we all talk, and rightly talk, about this being the day of the common man, and so it is. But in big industry it is the day of the uncommon man. These top men in industry have extraordinary ability and drive. In their industrial capacity, their commercial capacity, their salesmaship, their financial grasp and general leadership of men they are able to command the confidence of 20,000, 30,000 or 40,000 men in a huge industry, and successfully implant their personality, which runs through the whole business. These are the men we want in the lead of the nationalised industries. In present conditions they simply are not attracted. We have been notably more successful in the men we have been for-

tunate enough to appoint to the lead of these nationalised industries in recent years. This problem continues, and it will continue, because this is inherent in the structure of nationalised industries.
The second major defect which is also inherent is the absence of the profit motive and the discipline of the market. This undoubtedly tends all too often to result in uneconomic work in a nationalised industry. The life of a private industry depends on the skill of the manager in organising the capital and the labour of his industry to produce goods at a price the customer will pay. The manager's living in a business whether it is large or small, is the difference between receipts and expenditure—the profit margin. Therefore, the manager is subject to the direct market discipline. Inefficiency causing increases in costs or incompetence causing falling sales directly hit his profit. Whether it is a big business or a small one, this is the principle of which the manager or the management are continuously conscious.
The fact is that the profit system, which right hon. and hon. Members opposite very often attack, is still, at the end of the day, the finest economic system of carrot and stick that man yet has been able to invent. Today in Russia, with supplies becoming more favourable, the profit motive is being increasingly introduced in industry, for the very reason that it is sound economics to use it.
Naturally I accept that in many private businesses the reverse is the case. The answer to that is that, with increased competition, the inefficient will go to the wall. In efficient private industry, one sees the skill, the ingenuity and the imagination with which management gets this spirit to run right through the whole system. By such means as bonus systems, profit sharing, and shareholdings for workers, ways are found of making the individual worker feel part of the business and financially interested in its result.
The result is that in private industry there are greater enterprise and greater flexibility which do not exist in the nationalised industries. I will give one example. I refer to B.O.A.C. dropping the South American route. This was a classic instance. The Corporation dropped it because it was unprofitable. The independent line—B.U.A.—picked it up


again and took it on in immensely difficult circumstances because it believed that, in spite of all the difficulties, it could make a profit out of it. In the event, we may well have a double winner, from B.U.A. operating the route and "selling" the VC10. The fact is that the nationalised industries lack this basic incentive to the efficient use of manpower and capital which private industry has.
I have said that we have made progress. In 1961 the Conservative Government introduced a White Paper, Cmnd. 1337, which set up financial targets for each nationalised industry. This has undoubtedly been a help in improving the financial return of those industries. Even then, this is only at one remove from the reality. It is not the direct market force. Irrespective of the trading result of the nationalised industries, board salaries must be paid and new capital is provided, even if there is a loss.
If there is a serious loss, it must eventually be written off, as has happened in the case of the railways and of B.O.A.C., and perhaps the coal industry will have to be similarly helped. Certainly there is a tough investigation by the Treasury. It will certainly put every pressure and discipline it can on a Board, but that is not the same as one gets in private industry, where the management must, if it has made a loss, face a meeting of angry shareholders who demand a reconstruction to recover profit and cure the loss. In the final instance, if the management of a private industry fails to do that, it faces not only angry shareholders but insolvency and liquidation, with a loss of shareholders' money and, indeed, at the end of the day the loss of the managers' living as well. This is the reality with which private industry, whether small or large, lives. This is at the end of the day the reality with which the country lives. The more of us that share it the healthier we shall be.
Competition in nationalised industries is inevitably limited. These are, in the main, national monopolies. There may be some competition at the national level, but if it becomes too severe the Government step in. They step in to put an extra duty on oil to reduce competition with coal. They limit imports. They limit the independent airlines so that B.E.A. shall not have too severe competition. Both sides do it. We must keep the nationalised

industries going. They cannot be allowed to fail. They are national property and whoever is the Government must look after them. But this means inevitably that the nationalised industries cannot feel the sharp wind of competition that every private industry in the country must feel.

Mr. Merlyn Rees: Would the right hon. Gentleman argue that the keen wind of competition is felt in the iron and steel industry?

Sir R. Nugent: I would certainly not argue that the industry feels the full wind of competition. It certainly does not. This is one of the features which it is commonly agreed must be dealt with. [HON. MEMBERS: "How?"] The Restrictive Practices Court has already put the industry's agreement out of bounds. One of the problems for the future is to make the industry more competitive. However, it would be a great mistake to take the view that there is no competition there. There undoubtedly is. I should like to to see more competition in the industry.
My point is, not that the steel industry is perfect, but that in nationalised industries there is no competition at all. As a typical example I mention one point which came out in the Select Committee's examination of the electricity industry. Hon. Members will recollect the serious crisis we had in recent winters of shortage of capacity. The Select Committee found in the course of its investigation that the commercial policy of the industry was based on a simple promotional tariff which encouraged domestic users to use more and more. This was completely out of date in terms of the pattern of consumption and was largely responsible for the crises of lack of capacity which occurred in those two winters and which we still continue to have. We further found, astonishingly, that this great industry, which doubles every 10 years, for six years from 1955 to 1961 had not had a national survey of domestic consumption. It is inconceivable that this giant industry, growing as it is, should have been so out of touch with its customers. A private industry which had no idea what its customers wanted would be out of business in six months.
Let me say, no doubt to the relief of the House, that the industry's new chairman, as soon as he took up office, recognised these problems. The industry now has an admirable system of survey. It


has changed the whole structure of the tariff and is modernising its marketing system extremely rapidly. However, this does not alter the cogency of my point that this is what has happened. There is a tendency for such matters to happen because the wind of competition is not there.
The White Paper makes the specific claim that by nationalisation there would be an improvement in labour relations. This simply is not borne out by experience. The record over the years shows that in nationalised industries on the whole the relations between management and staff and labour productivity generally have not compared favourably with the best in private industry. Taking industries like British Railways and London Transport, the point that emerges is that men and women with a grievance are not deterred from taking industrial action which will twist the arm of the public because they are working for a nationalised industry any more than they are when working for a private industry.
The only factor which will deter them from taking industrial action whenever they have a grievance is if they have a management which understands it, caters for it, solves the problem for them and wins their confidence again. We were astonished by how old-fashioned the wage structure and so on were in these industries, with the whole system dependent upon a large amount of compulsory overtime. This is fantastically out of date for men who are doing an extremely important job, but I am glad to see that our recommendations were helpful in resolving the salary system for men who take responsibilities on behalf of the whole country.
I do not pretend to have a great knowledge of industry, but I have been around and seen many industries. The amount of imagination and thought put into the conditions of work for individual workers in the nationalised industries is far below the best in private industry. This is a fact, and it is not true that because men and women are working for a nationalised industry they will do better. They will do better only if there are better conditions. The problem in nationalised industry is partially because the leadership has been less effective, for the reasons which I have described. It is partially

because the boards have more limited scope for making settlements. They have the Minister looking over their shoulders and saying, "I cannot stand for that. It will have reactions everywhere else".
I have put before the House what I believe are the two inherent defects in the nationalised industries. These must be weighed against the advantages which the Minister put before the House today. I believe that they are serious defects. We have made some progress in overcoming them. We shall make more if we all try, but opening the controversy again does not help. In a manufacturing industry like steel these defects, as the existing managements gradually disappear, will become more serious.
I do not believe that the Government's proposals will increase the efficiency of the industry. I do not believe that we shall obtain better results from the manpower and capital employed. I do not believe that we shall get better and more rapid modernisation. It is for these reasons that I join earnestly with the right hon Member for Vauxhall in asking the Government to think again about this. The nationalised industries are still at an experimental stage. We have enough to experiment on. Let us stop the extension of nationalisation. Let us keep the subject out of the field of controversy and then perhaps we can put our heads together to make better the nationalised industries which we already have.

6.14 p.m.

Mr. R. E. Winterbottom: My claim to contribute to the debate is that I come from a constituency in Sheffield which is famous for the special and alloy steels which were mentioned by my right hon. Friend when he opened the debate. If I mention Sheffield again during the course of my speech without special reference to the City of Sheffield, I ask the House to take it that I mean that area where special and alloy steels are manufactured which is wider than the boundary of the city itself.
I hope that the right hon. Member for Guildford (Sir R. Nugent) will forgive me if I do not take up his remarks. I have not the time. I propose to lower my trajectory to the right hon. Member for Enfield, West (Mr. Iain Macleod), who said several things on which I want to join issue with him. First, the right hon.
Gentleman must get some of his facts right about the use of oxygen. There is a great difference between the use of oxygen lancing and open-hearth furnaces and the use of the oxygen converter, originally invented in the Austrian State-owned Voest works in 1938. In any case, the right hon. Gentleman is wrong in his conclusions.
We are very much behind other countries in the use of oxygen. According even to the latest "Steel Review", published by the Iron and Steel Federation, we shall not have 18 per cent. of steel made in oxygen converters in this country this year. France already makes over 26 per cent. Germany has exceeded 22 per cent., and the rest of the Common Market countries have exceeded 20 per cent. I see no justification at all for the right hon. Gentleman's figures, unless by accident he has received figures from the Iron and Steel Federation which usually suffers from the difficulty of finding what is accurate and what is also useful for propaganda purposes.
The second point made by the right hon. Gentleman was concerned with the election. If one considers what happened during the election on the issue of steel nationalisation, one is driven to the conclusion that in every steel constituency the majority in favour of the Government's supporters increased considerably. It was increased in Sheffield. We won four seats out of six, and every one with an increased majority. If we had had one more week of the campaign we could have won five seats, and the hon. Member for Sheffield, Heeley (Sir Peter Roberts) would have been defeated. As it was, his tremendous majority was reduce to almost negligible proportions.

Sir Peter Roberts: Would the hon. Member like to tell the House whether his Labour vote figure went up or down in that election compared with the previous one? Is it not a fact that the number who voted for him was less than before?

Mr. Winterbottom: No.

Sir P. Roberts: Yes they were.

Mr. Winterbottom: They were almost precisely the same as before. It was my Conservative opponent who failed to register the same number as before, and

my majority was increased by 1,000. I repeat that if we had had one more week of campaigning we would have won one more man to swell the support for the Government in the Lobby tonight. But it is not enough to talk about steel as an election issue. I join issue with the right hon. Member for Enfield, West because he talked about the feeling against steel nationalisation since the General Election. What proof has the right hon. Gentleman that there has been any diminution of support for the nationalisation of the steel industry? I know of nothing which has been published to warrant that conclusion, but I have something in terms of proof against the right hon. Gentleman.
Those who worked in steel in Sheffield believe in its nationalisation. They have had a committee since the General Election, drawn from almost every steel area in the country, including South Wales, and representing men from the rolling mills, the strip mills, the open-hearth furnaces, the electric arc furnaces, and the oxygen conversion system and representing also those in administration. May I say, not too quietly either, that many of the managers in the steel factories are disagreeing with some of the managing directors on the issue of steel nationalisation? They have met to consider their attitude on steel nationalisation and how they would nationalise the industry.
This is a very different picture from the one painted by the right hon. Gentleman. Here is proof that there is living activity away from a General Election and prompted by the desire to make their industry part of the State machine. Let us not forget that these people, who have thought about the problems carefully, know almost all there is to know about the steel industry. They know some things that the right hon. Gentleman did not mention in his speech. For example, they remember that, two years ago, about 10,000 workers in Sheffield had lower incomes as a result of trade contraction caused by the previous Government.
This group of people, expert in steel, have published their views in a document. They say that the only security for the steel worker and for workers in other industries lies in a planned economy for Britain into which the steel industry is integrated.

Mr. R. Gresham Cooke: Do not these people in the steel towns also say—I agree that there is quite a measure of support for nationalisation among them—"People in other nationalised industries, the railways and so on, have a rather nice soft option; if they want wage increases they can lean on the taxpayer"? Is there not that element in the thoughts of people who would like nationalisation?

Mr. Winterbottom: Red herrings are cheap. I wish that the hon. Gentleman would not drag them across the trail.

Mr. Gresham Cooke: It is true.

Mr. Winterbottom: I am telling the House that these people believe in the nationalisation of steel. They recognise that steel making and steel manufactures, two different things, are vital to this country's prosperity, essential for the development of our export trade and our home industry if we are to get out of the economic difficulties into which we have been put.
I have a copy of the report which they have published. There are minor diver-gencies from what is said in the Government's White Paper, but it is notable how similar the two documents are. Although they did not know that a White Paper would be issued, and the Government did not know that their report would be issued, there is a remarkable similarity between the two and the proposals which they contain. Both before an election, during an election, and since an election, there has been a remarkable unanimity of thought among different people, all concerned with the steel industry, culminating in a document which is truly representative of all their thoughts, the Government's White Paper.
I have a point to put to my right hon. Friend the Minister about some of the firms not covered by the Government's proposals for nationalisation. In the Sheffield steel belt, only three of the giant major firms will be affected, but there are many firms making special and alloy steels and steel manufacturers which make a worth while contribution to our economy. Special and alloy steels are the dearest steels in this country and they have the highest convertibility value. I agree that these firms should not be included in the nationalisation programme, but I suggest to my right hon. Friend

that, by excluding them, we may, perhaps, be losing something of benefit to the State-owned industry.
I suggest, with great respect, that provision should be made in whatever Bill eventuates as a result of acceptance of the White Paper—it will be accepted tonight—for helping some of these companies. Some of them now have an export trade supported by Government assistance recommended under the export guarantee scheme. Some of their contracts are initially paid for with Government money. I am not grumbling at that, but I am suggesting that we ought to have a finger in the pie if we do things like that.
Moreover, the manufacture of the types of steel which they produce could be developed without challenge to the major industry which we envisage being created as a result of steel nationalisation. Some of this steel is like the 1,500 million ingot tons which are imported into this country at present. I suggest that it might be a good thing to put a Clause in the Bill allowing the Steel Corporation some means of assisting, controlling or helping—call it what one will—these smaller firms, even to the point of grouping companies or grouping boards, in order that we might benefit from the full potentialities of the whole steel industry.
I come to my main point, which is quite simple. I challenge the steel industry on its record. I am sorry to have to do so, but I believe it to be essential that the steel industry should be nationalised in order that we may completely plan the country's economy. This industry can serve the real needs of Britain only if it is nationalised. Its fault has not been what some people think, something for which we condemn the steel industry in every way. It has done many good things. It has made many notable achievements. Its sins have been sins of omission rather than commission. What has affected the industry's whole progress has been what it ought to have done but did not do.
I quote from The Guardian of 21st November, 1963. This is a description of the steel industry which was not challenged in the Press at the time, and, as far as I know, it has not been challenged since and will not, I think, be challenged now:
We are fairly well advanced in the sintering of iron ore"—


I agree—
but in the use of high top pressures and in the instrumentation of the blast furnace we seem to be"—
quite contrary to what the right hon. Gentleman said—
behind the Russians. In the use of oxygen (where the Austrian State-owned steel works lead), in continuous casting (led by the Russians), and in vacuum casting (led by the Germans), we are unnecessarily backward.
That is a straight challenge to what the right hon. Gentleman said. The statement has never been challenged, and I believe it to be as true today as it was when it was written in November, 1963.
I may not be right in my approach to life, but I have always believed that, if one wants to find anything out about a person, an industry or anything else, the finest way to set about it is to get a questioning mind to ask "Why?". I want to know why things are as they are in the steel industry. Why is it that all the major inventions and all the major developments which have taken place in the steel industry since the end of the war emanate from America, from Russia, or from our European rivals, and why do we take such a long time before we begin to follow?
Why is it that in the publications of the O.E.C.D. we are at the bottom of the league table in annual growth of steel output per worker for the period 1950–62? Why have we the highest percentage rise in average basic steel price between the years 1952 and 1962? Why are the factory builders of Britain grumbling today because they cannot get the steel they want to build the new factories in the developing parts of the country? Why is there a waiting time of six months?
I keep asking "Why"?, but the right hon. Member for Enfield, West sits there, like little Jack Horner, ignoring my questions and ignoring the facts. I will tell the House why. It is because there is no positive power centralised in the industry to drive it to the maximum peak of efficiency necessary to make its full contribution to our country's economy. They do not do these things in Russia or in America, a capitalist country. They get enough plant of the kind and quality required to satisfy modern needs, and they use it to the full. Until we learn to do the same we shall always have a balance of payments problem, we shall

always have inward trepidation about the value of the £ abroad, and, because steel is such an important factor for other industries, we shall always have an adverse effect on our industrial development in Britain.
I wish to refer now, in complimentary terms, to the managing director of a steel factory in Sheffield who is Chairman of the Steel Works Plant Association. In the April issued of Steel Review, he wrote an article, "Revolution by Reason", which is of great significance for this debate today. In it, he tells of the development of the Association. I am concerned because, over the past few years, contrary to what the right hon. Member for Enfield, West has said, the increase in our steel exports has been negligible. We cannot look to steel exports to build up British trade abroad to buttress Britain's effective development.
If steel has to go abroad to have its real effective development, it must be with its convertibility value in the shape of something else. It is better to send machinery than steel. We have not been in that happy position of sending machinery abroad. The Ebbw Vale works were built with American plant, as were the Shotton works. It is true that there has been an improvement in the situation.
I say this in reaffirming my emphatic belief that nationalisation is the only possible way of making the steel industry really contribute to the future wealth of Britain. When we have nationalised and effectively reorganised the steel industry—and it will be a hard and difficult job financially, costing much more than the present steel industry can afford—we must then start talking in terms of exporting our machinery abroad. We must then start talking in terms of financing the countries which buy our machinery abroad. Our steel industry cannot afford to do that.
We must, therefore, nationalise, whether hon. Members opposite like it or not. The only way is to have a State-owned, State-directed and State-inspired industry which has responsibility to the people of the land.

5.37 p.m.

Sir Peter Roberts: I should like, first, to deal with the speech which we have just heard from the hon.
Member for Sheffield, Brightside (Mr. Winterbottom). The hon. Member nearly always looks backwards and he has done it again today. Practically everything that the hon. Member said is wrong. His facts are wrong and his deductions are wrong.
I understood the hon. Member tried to tell the House that the results at the last election in certain constituencies in Sheffield showed that the people of Sheffield were pouring to the polling booths in favour of steel nationalisation. That is a fair summary of what the hon. Member said. Let me give the facts. In the constituency of Attercliffe, where there are big steelworks, the Labour vote went down by 3,300. In the hon. Member's own constituency, the Labour vote went down by approximately 1,000 votes. In the Hillsborough constituency, it went down by 1,400 votes and in the Park constituency by 2,000 votes.
Was the hon. Member trying to make the point that great numbers of people voted for nationalisation? The Minister tried to make a similar point, and I suggest—

Mr. Winterbottom: Mr. Winterbottom rose—

Sir P. Roberts: Let me finish the point. The Minister also had been given similar facts to the hon. Member by someone on the opposite side of the House and he, too, has used them. I hope that we hear no more of them.
Let us go even to Rotherham, where there are other great steelworks. In Rotherham, the Labour vote went down by 1,300. That, apparently, was when Labour supporters poured into the polling booths. The hon. Member for Brightside is trying to make out that this represents great support for steel nationalisation in Sheffield and Rotherham, whereas he knows as well as I do that that is completely untrue.

Mr. Winterbottom: I know this much, too, that your votes went down even more and that your proportion of the votes was even less.

Mr. Speaker: Order. The hon. Member must remember that he is addressing his observations to the Chair.

Sir P. Roberts: We had better leave the result of your election alone, Mr. Speaker.
The second point in which the hon. Member for Brightside was wrong, or in which he deliberately misheard my right hon. Friend the Member for Enfield, West (Mr. lain Macleod), was when he took up the matter of oxygen production. The hon. Member completely misunderstood the point and produced figures from 1963, the old looking-backwards idea. My right hon. Friend the Member for Enfield, West made the perfectly valid point that the technical use of oxygen in this country is now in advance of practically any other country. The other countries started ahead of us, but we are now developing through and past them, and because we have these latest developments, we are in the lead. That was the point made by my right hon. Friend.
When the hon. Member makes the point about labour units per ton of steel, which was made also by the Minister today, let us remember that it would be easy if we were to have a conflict with the trade unions and to remove certain men on the shop floor or apprentices or to sack people from the factories. In that way, we could increase the output per man. But I have no unreasonable desire to do that. Our relationships in the industry are first-class. We work together as a partnership. If the hon. Member is attacking this, he is attacking the partnership which exists in the steel industry between management and workers.
I turn now to the main point of my speech and I regret the diversion into which I have been encouraged. I wish to state first, as I usually do in these debates, that I have an interest in the matter. I am the Chairman of Hadfields, one of the great steel companies in Sheffield, which, under the present scheme, is not, in any event, directly to be nationalised. I am also Chairman of Wellman, Smith and Owen, which supplies plant to all sections of the United Kingdom steel industry and to a large number of steel companies all over the world. I hope, therefore, that that will lend support to what I have to say.
I am sad today. It seems to me that we have gone right back 20 years to the


time when I first entered this House in 1945, when one side proposed to nationalise and the other side announced its intention to denationalise. Between the two, this great basic industry of the country is once more to be torn. When I come to the end of my remarks—because having had this challenge, it is my duty to oppose it—I believe that the interesting feature of this debate today will have been the subsidiary debate which is taking place within it, which was started by the right hon. Member for Vauxhall (Mr. Strauss), was followed through by my right hon. Friend the Member for Guildford (Sir R. Nugent) and is supported by me, that sooner or later a bridge must be found between the two parties in this matter.
We cannot have the extremists like the hon. Member for Brightside or, I suspect, the hon. Member for Poplar (Mr. Mikardo) and others, dragging the industry one way, nor must we have the extremists who wish to see complete independence for the steel industry dragging us the other way. It is the duty of both sides of the House to find a solution. I do not think that we will find it tonight. With the members of the Government Front Bench in their present mood, we are not likely to find an immediate solution. One day, however, I hope and pray that we shall.
Meanwhile, we have to continue to drum away at the minds of the dyed-in-the wool Socialists on the benches opposite to try to get them to understand what are the problems which divide us. We all know that the problems are of a difference of political approach. Yet again, at the Dispatch Box today, the Minister, having given us no facts and no figures, finished his speech by saying, "My case depends upon the facts and the figures which I have given." That is completely wrong and I regret, therefore, that I must briefly go through the position again.
Before doing so, however, I wish to refer to what my right hon. Friend the Member for Enfield, West said concerning the policy of the Conservative Party. In case there are any illusions about this on the benches opposite—because I have read in the Press and heard it said that the Labour Party will so scramble the steel industry that it cannot be unscrambled—let me say from my fairly

vast experience that it will not be possible so to scramble the steel industry that it cannot be unscrambled.

Mr. Mikardo: Wait and see.

Sir P. Roberts: I assure the hon. Member for Poplar that any steel industry can be decentralised either into products or into geographical areas. The Labour Party took quite a part in this in West Germany after the war, when the hon. Member for Sheffield, Attercliffe (Mr. John Hynd), I think, went over to produce plans to decentralise the German steel industry. Those plans were effective, but subsequently, of course, the steel interests in Germany came together again. It is, however, possible to unscramble the industry, and hon. Members opposite should not have any disillusionment about this.
My second point, which may be of interest to the hon. Member for Poplar, is that whatever the price which may or may not be paid for the industry under a Bill which may come before this House, it must be the duty of a Conservative Government when it denationalises the industry to denationalise it at what price it can obtain. We have had the example of nationalisation and denationalisation with vast sums in the City of London moving backwards and forwards. There is, I suppose, a certain cloud over the industry, particularly as politics are still in it, but it is the duty of a denationalising Government in the future to sell the shares to those who will buy them for the price that they will pay. If any loss results, it will be the result of the action not of the denationalising Government, but of the present Government. Let there be no misunderstanding about this. If today, tomorrow, next year or the year after the Government pass a Bill under which compensation is paid, and if subsequently, under denationalisation, the money which is brought back into the Exchequer is less, the loss will be the responsibility of the present Government and not of a future Government.
I turn now to the question of the mandate for nationalisation. I hope that I have denigrated the argument of the hon. Member for Brightside, who tried to make the point that the electorate voted for nationalisation. Even if it is suggested that steel nationalisation was


an issue at the last election, let us see what the White Paper says. My right hon. Friend mentioned paragraphs 27 and 28, but what about paragraph 29? That paragraph states that if the permissive clauses in the memorandum and articles of association of a company permit it to operate in another industry then the Corporation can, with reference to the Minister, nationalise such an industry.
I decided to look up the memoranda of some of the companies which are named in the list given in the White Paper. I understand from the White Paper that for certain ancillary activities, permission must be given by the Minister of the day. The White Paper certainly does not state that there need be any reference back to Parliament. Therefore, if the Government's proposal goes through, it appears that the Corporation can run the machine tool industry, the aircraft industry, the motor car industry, the fertiliser industry, farming, docks and wharves, banking, licensed victuallers and hotel keepers, to mention a few!
These are some of the powers which the Government are taking, or could take for themselves, under paragraph 29 of the White Paper without reference back to the House of Commons. Is it really suggested by the hon. Member for Bright-side that his constituents were voting for the nationalisation by the back door of a vast part of British industry? This is State Socialism going mad. This is the sort of thing which would conjure up with joy the spirit of Karl Marx—State Socialism—[HON. MEMBERS: "Dear, dear."]—Hon. Members say, "Dear. dear", but do they know that Karl Marx was not a Communist, but a Socialist? I reckon that some of the Socialists opposite are to the left of Karl Marx.
The fundamental issue which we are debating is, therefore, whether the people outside the House want to see a form of State Socialism as embodied in this White Paper, or whether they believe in the principle of controlled private individual enterprise as maintained by this side of the House.

Mr. Mikardo: By the Restrictive Practices Court.

Sir P. Roberts: As the hon. Member for Poplar well knows, the Restrictive Practices Court, under legislation brought in by the Conservative Government, has been effective with the steel industry and competition now exists. One hon. Member opposite said earlier that there was no competition. Is there any hon. Member opposite who thinks that there is no competition, both as to price and quality, in the steel industry? If there is, I will take him and send him out on a selling job overseas.

Mr. Robert Sheldon: Would the hon. Gentleman send the same selling hon. Gentleman into the home market, and would he find competition in the home market?

Sir P. Roberts: Certainly, I shall be delighted. I do not offer any money. I shall start him on steel castings. The suggestion that at the moment there is no price competition in the steel industry is nonsensical and not worth laughing at.
Having dealt with the two main principles, I wish to return, as I am entitled to return, to the claims about the "sick economy"; the suggestion that the facts and figures of the case make the Labour Party proposals acceptable. My right hon. Friend the Member for Enfield, West, has already enumerated our success story in steel, of capacity and of ideas. It was suggested from the benches opposite that we in the steel industry were deficient in ideas. We produce about 10 per cent. of the world's production of steel. Is it suggested that we should have 100 per cent. of the ideas? Are we not to let some other countries have some ideas? But we have more than 10 per cent. of the total number of ideas. It is easy to run down the vast research organisations of the steel industry run not only by the Iron and Steel Institute, but by the companies themselves.
I have already dealt with prices and labour relations and I come now to profitability. My right hon. Friend the Member for Guildford made an interesting point about the acceptance of profitability. This is the beginning of the bridge which I wish to see; a bridge between the two parties, the acceptance of profitability over there on that side of the House, and the acceptance of some sort of control, as we have already


accepted it with the Iron and Steel Board, on this side of the House.
I do not wish to talk about R.T.B.; I hope that it may be a good customer of my companies, but what about the profitability of the National Coal Board? The House should see the latest figures of the Coke Division of the Coal Board, which were admittedly produced some months ago and for a 15-month period. The Coke Division, which is directly associated with the steel industry, lost £6 million in 15 months. As hon. Members opposite always ask about interest in cases like this, I will say at once that there is interest of £2 million on top of that, so that the loss is about £8 million over 15 months. This is the closest approach we have of a product, coke, which is used in the steel industry.

Dr. Bray: Can the hon. Gentleman say how much the South Durham Iron and Steel Company lost on its coke ovens in the same period?

Sir P. Roberts: South Durham has not been in a very good financial standing and that may be the reason why hon. Gentlemen opposite want to nationalise it. Its position is now much better because it has been spending a vast sum of money which is now beginning to fructify.
I want to conclude by briefly discussing size. We heard the Minister say this afternoon that we must get as big as United States Steel, say, 27 million tons—the bigger the better! Is this really so? In our sort of home-based economy I do not think that this vast size is to be aimed at. Steel-making is like cooking—one has a pot and one puts things into it and steel-makers are as temperamental as cooks.

Dr. Bray: Absolutely true.

Sir P. Roberts: I would not say that they were awkward people to deal with, but they have to be dealt with carefully. People like this just cannot be put on a production line. I have said before and I say again that we should not be carried away with ideas about the vast size of some of the American organisations, because the American organisations are broken down themselves into individual steel works. United States Steel does not have one enormous rolling mill rolling 27 million tons. It has a number of rolling

mills dotted around the country. Do not let it be thought that size is necessarily right.
On all counts so far the Government have not made a case on facts or figures, and so they come back to the White Paper. They do not put these things into the White Paper, but we have discussed them over the years. We come down to three things. Let us see whether we cannot knock down these as well.
Do the Government say that we must nationalise because of lack of money? My right hon. Friend the Member for Enfield, West brilliantly exposed that argument. There is no question of lack of money, unless, of course, the dagger of nationalisation is held at the throat of the steel industry for ever. Competition; I have already asked any hon. Member who wants to do so to come and work for me free and I will show him, by heaven, what competition there is!
We come thirdly to "Socialism knows best". This is Socialism and that I cannot answer. Hon. and right hon. Gentlemen opposite are Socialists and, therefore, for Socialist principles they want to nationalise this industry. Let them rest on that argument. It is the only ground on which they are safe and perhaps they can persuade Socialists to follow them.
But they know that the vast majority of the country—for I hope that tonight we shall be supported by the Liberal Party—[Laughter.]—Are hon. Members opposite laughing and scoffing at 3 million votes? I do not know whether the Liberal Party will vote tonight against the Government, but I suggest that they will show that those 3 million are anti-nationalisation votes. There is the Conservative Party with 12 million anti-nationalisation votes. There is no doubt that the country as a whole is against steel nationalisation. Let the Government go to the country on this and they will be defeated.

6.58 p.m.

Mr. Woodrow Wyatt: I had hoped that the hon. Member for Sheffield, Heeley (Sir P. Roberts) would develop rather more his views about a bridge between the two parties so that we might bring to an end once and for all this tiring warfare over steel, but I fear that he left a very negative impression about what positively can be done in this respect.
I find this a very sad occasion. We have the best Government that this country has had for a very long time. In it are some of my dearest friends. They are more than able and by their performances at the Dispatch Box they have shown themselves, in many cases, to be quite outstanding. I think I could say that they are, indeed, a Ministry of all the talents. They have made difficult decisions with great courage. They have made even the shadows of the "Shadow" Ministers opposite look even more dim.
I believed and hoped that their ingenuity, their modern outlook and their sense of what is possible in British politics would lead them, in this White Paper, to a major break-through on steel. I did not expect it from the right hon. Member for Enfield, West (Mr. Iain Macleod). I did not get it. I did not think that he would have any new ideas and he gave us none. We had only the old cry that if we nationalised steel, he would denationalise it.
I thought that we would soar away from this arid land of 100 per cent. nationalisation of steel. I thought that we would, and we could, transform Clause Four into a new, living concept of how, in a democracy, Government control and ownership can be married with the legitimate private ambitions and enthusiasms of private people in industry. It was a great opportunity to start a new chapter in our economic history. Inevitably, economic units everywhere in the free world are growing larger and larger. They must do so if they are going to be successful and if they are going to take advantage of the economies of skill and size to cut their costs and be more productive.
New giants in oil, chemicals, the motor car and the aircraft industry and the like not only will arise, but are arising and are starting to dwarf in power the feudal barons of old. There has to be some way in which the Government can effectively control those ever-growing units in more and more industries, effectively, without reducing their efficiency or their zest.
This is exactly what the White Paper does not do for steel. It proposes 100 per cent. nationalisation and we cannot get away from that—about 90 per cent. of the steel-making capacity of the country.
It treats steel as a single commodity or service, like coal, electricity or the railways. It disregards the complexity and the worldwide ramifications of the steel industry. It aims to turn the lot into a branch of the Civil Service, one great central corporation. The White Paper is written as though the last 13 years had never happened and as though Dr. Beeching had never existed. It has no new ideas. Instead of helping the industry, I fear that it will actually hinder it.
From the Second Reading of the Bill, if the Bill ever comes before the House, there will be two and a half years at least, and, as my right hon. Friend the Member for Vauxhall (Mr. Strauss) pointed out, it may be three, in which case the industry will merely tick over without any advances being made whatever.
That is the shortest time, my right hon. Friend said, in which the new Corporation could prepare its plans for the structure of the industry and start implementing them. Even if management is not obstructive during that time it can hardly be expected that it will be co-operative in engineering the ruin of everything it has lived for and believed in. It did not do so before and is not likely to do it again. There will be no more much-needed rationalisation plans, such as the recent Consett-Dorman Long arrangement by which they used each other's facilities. There will be no further attempts in that direction and no urgency to reach a new price system, which must be reached as a result of the Restrictive Practices Court's decision.
Things will be left to meander on until the Corporation takes over, and this is just when our economy needs the greatest possible effort from everybody. At this very moment there will be a fatal lethargy in the steel industry for the next two to three years if this plan is proceeded with. When the Corporation gets going some things may be still worse. The Iron and Steel Board may have lacked many powers, but at least it was able to control the maximum price of steel.
Under the Corporation no impartial body will control steel prices either in the private or public sector commercially. They will charge exactly what they like. When prices go up, and no doubt they will at times, the excuse will be made


that the increased cost of plant and equipment is responsible. But there will be no way of looking behind those increases, testing them out and forbidding a price rise if an impartial body thinks that they are not necessary.
The 10 per cent. holding in private hands would have virtually no public direction at all. Re-rollers and the special steel makers will be able to charge whatever prices they could get on the market and some of them will make far more money than the speculators on the stock exchange that my hon. Friend the Member for Poplar spoke of. There will be no restriction or curb at all. When the Corporation gets going the doctrine for them will be that profits are not the most important thing. The criteria will be the far too vague one of public interest. That, as we have found with the railways, is a highly dangerous doctrine. Even in the steel industry it has already been demonstrated with Richard Thomas and Baldwin. I am not saying that Richard Thomas and Baldwin is inefficient. I do not think that it is. But it does lack commercial discipline.
The Spencer Works were excessively robust and expensive for the job in hand. I think that that is agreed by most steel makers in the country, or most experts. The general approach was extravagant. It was finished in far too great a hurry for no other reason than that a date had been given and the managing director was very anxious that the date should be met. If the money had come from merchant banker and institutions, instead of through the Government, which Richard Thomas and Baldwins seemed to think had a bottomless purse, those works would have been built for the original estimate of £100 million, and not for the £150 million which they eventually cost.
The Richard Thomas and Baldwins losses would have been nowhere near so great and its effectiveness as a steel unit would have been much higher. The 13 selected companies, in my view, are bound to suffer from the lack of pressure of the balance sheet. There will always be a tendency to overestimate when plant and equipment is being built. It will be just that much more expensive because those in charge will be afraid of a failure. They will want to have a showpiece and the risk-taking will be cut out. The merchant bankers and the

institutions who would closely examine the cost of any project in the past will not be there to ask, "Will this really make a profit when it gets going?".
At present, there are about 70 million tons of steel over-capacity production in the world at large. This is not the moment to take any risks in reducing the competitiveness of our own steel industry. It is a difficult enough task to do, as the steel industry have been doing and sell abroad about £200 million worth of exports a year. With the world in a state of over-capacity of steel, it is difficult enough already, without doing anything which may endanger our competitiveness.
Unless the pay scales to the public corporations are drastically upgraded, many of the best men will leave the industry. The average salary of a chairman for a public corporation is £12,000 or £12,500 a year. Everybody else gets less, on a decreasing scale, and yet there are scores of people in the steel industry at present, not at the top of their firms, who are already getting as much as that. Now they will feel—whether for mercenary or status motives—that they have nothing higher to aim at. We may think that this is very deplorable, but it was one reason which led us to purchase Dr. Beeching at £24,000 a year.
There is another great danger, and this is the greatest of all for the Labour Party. It is that it will nationalise steel 100 per cent. and then have a failure on its hands. That will be the last time that the party will ever be able to advance a theory on public ownership in industry.
I suggested an alternative to my right hon. Friends. It was—and here I come to the bridge to which reference has been made—that instead of nationalising the 13 firms 100 per cent. the Government should acquire 51 per cent. of their equity shares. These would be held by a holding and directing company which would treat the 13 companies, plus Richard Thomas and Baldwins, as subsidiaries. It would be able to appoint two directors to each subsidiary company to ensure that its general policy was implemented.
The first advantage of such a scheme would be that the compensation required would be far lower. Instead of paying £542 million for the companies with quoted securities, to say nothing of what we shall have to pay companies without


quoted securities, which would be a large enough sum in all conscience, the price could have been much lower. The average of the six pre-election months could have been taken. Debenture and preference shares could have been left out and dealt with in a way which I should like to discuss later. Fifty-one per cent. of the equity of the companies with quoted shares could have been acquired for £178 million. That would have given complete control for £360 million less than the Government are proposing to pay.
No one would have been penalised—quite the reverse—because from the moment that it was known that a permanent settlement had been reached and that private participation was to be allowed the 51 per cent. share owned by the Government and the 49 per cent. share left in private hands would have risen sharply in price on the Stock Exchange. I see that hon. Members opposite agree with that. The Government would have started with a book profit at the very beginning, which would have been rather nice for a publicly-owned concern, for a change. Those with a 49 per cent. shareholding would also have been happy.
That is why it would have been possible under my scheme to have compensated at a far lower rate than the Government are proposing to do. As it is, the method of compensation chosen by the Government—and here I agree with my hon. Friend the Member for Poplar (Mr. Mikardo)—will inject many millions of pounds of extra money into the country's economy quite unnecessarily, and my right hon. Friend the First Secretary, whose problems are great enough, will find that the Government are paying for 100 per cent. ownership £120 million more than they need have done which will be changed into gilt-edged stock and which will probably be spent, to a large extent, on motor cars, houses, yachts—all the things that he is trying to prevent us from spending our money on.
Under the 51 per cent. scheme anything can be done by way of control and direction that can be done with 100 per cent. ownership. I will clear up any points of disagreement on that in a moment. Incidentally, if I or any other hon. Member owned 30 per cent. of I.C.I. or the International Publishing

Corporation, we could start running it tomorrow without fear of being outvoted by anybody else. However, for the sake of this argument, I am selecting 51 per cent.
The best informed opinions seem to suggest that the ideal output for any steel company, or group of units in a steel corporation, is about 7 or 8 million tons a year. I know that there is argument about this, but that is a fairly reasonable suggestion. At the moment, our largest units are producing only 3½ million tons. A holding and directing company with 51 per cent. of the shares of the 14 major companies could easily arrange the structure of the industry into four competitive groups each producing 7 or 8 million tons a year. If the Conservative Party could rationalise the aircraft industry into the groups which it did without any share ownership, we can obviously do it with 51 per cent. ownership. Under my suggestion the Iron and Steel Board would not be abolished. Its powers would be expanded and it would also be given power to initiate, which it lacks today.
Under my scheme, a new holding and directing company and its subsidiaries would not be allowed to put up the price of steel without effective challenge; it would still be subject to the Iron and Steel Board on the question of prices. But the expanded Board would be able to go further than the Government's present plans. Not only would it retain control over the whole private sector, which, for some quaint reason, the Government are to abolish entirely—it completely baffles me why control over the whole of the private sector is to be removed—but it would also have power to acquire 51 per cent. of any other firms in the industry and make such firms subsidiaries of the holding and directing company if it thought necessary. That would be particularly important with regard to re-rollers and special steel makers who, under this dispensation, are to be left out completely and have no pressures on them to rationalise or behave in a more logical economic way.
Between them, the Iron and Steel Board and the holding and directing company would be able to exercise all the control that they needed throughout the industry and the Iron and Steel Federation, of which my hon. Friends are rather too


afraid—I do not believe that it is as Machiavellian or clever as they imagine—would virtually vanish and have no power. Having a profit motive from the start would put public ownership on Beeching lines at the beginning. We would not have to wait 10 years to repair the damage, as I am afraid that we may have to do if this scheme goes through.
Even the Russians, as I discovered when I went to Russia last September, now realise that some kind of profit discipline or balance sheet discipline is essential, and they are trying to introduce it. There was an interesting article about this by Mr. Crankshaw in the Observer on Sunday. There is a great deal of argument in Izvestia and Pravda at this moment about how to introduce the profit motive into the Communist economy. One editor of a newspaper in Moscow said to me, "We will be able to make private profit work much more effectively under Communism". That, at any rate, is the Russians' current approach. It is an odd idea to abandon it here when the Russians, after 50 years, have just started discovering its necessity.
It has been said that my scheme would not work because of the conflict between the public and private interest. It works in Italy. I was sorry to hear the right hon. Member for Enfield, West offer a gratuitous insult to a very fine industrial organisation, the Institute for Industrial Reconstruction, in Italy, and sneer at it because it was originally conceived in Mussolini's day. Does not he know that all its great triumphs have been achieved since the war under democratic government, which we and the Americans have tried to make a success, after the death of Fascism? If the right hon. Gentleman's party is to be a European party, it is not a good idea to start by insulting a friendly Government.
The institute for Industrial Reconstruction, which is Government controlled, owns over half the steel production of the country, but over 40 per cent. of the shareholding in that section of its activities which deals with steel is held by private hands. This works. It has not inhibited Government control in the least. The Taranto Steel Works, one of the largest in Europe, with an output of 2½ million tons a year which is due to expand to 6 million tons, was sited in the best place to supply exports to the world and

possibly not in the place internally in Italy which would have suited commercial interests best.
The money which this organisation needs for expansion is raised, in the main, from the public on the stock market and through merchant banking institutions. It is not raised, in the main, from the Government. That disposes of the argument that only a nationalised industry can work, because that is the only way of getting money for development.
Of course it is not the only way. If people know that it has reached a permanent settlement, that there is a private shareholding in it from which they might get a return, one can raise the money just as easily on the stock market, without having to go to the Treasury, although with the 51 per cent. arrangement the Government would be expected to take part in any new development, and why not?
On the stock market in Italy the performance of the shares of the steel section of the Institute for Industrial Reconstruction is better than the average of other great enterprises. I hope that that will console some of my right hon. Friends who have been worried about unfairness to shareholders under my scheme, and I hope that it satisfies hon. Gentlemen opposite.
I know the argument that the 49 per cent. shareholding interest under my proposal would have the duty of fighting for the maximum profits, and this might conflict with Government policy. I accept that this is a serious argument, but I do not think that it is valid. All Governments, since the war, have forced the steel companies to act against the strict commercial interests of their shareholders. We have heard about Colvilles this afternoon. It would never have built the Ravenscraig Mill had it not been told to by the Government, but it did, and lost money, or at least the profits were lower than they otherwise would have been. Shareholders are badly treated, but they would not be treated worse if the Government owned 51 per cent. of the shares.
For years the steel industry has been directed, or asked, or urged, not to export steel. This may sound odd, as we had a lot of discussion about the export of steel. But at a time when the industry


could have sold steel abroad at £10 a ton more than it was getting in Britain, it did not export its steel, largely at the request of the Government, but supplied the home market so that it could export manufactured goods more cheaply. That was directly against the interests of share-holders.
The closing of works has continually been subjected to Government requests not to close them because of social reasons. I am not saying that is necessarily wrong, but, again, it is against the interests of the shareholders. The Ebbw Vale works might easily have been closed already if it had not been for the Government's request to keep them open, and it would be on the list to be closed fairly soon. Private shareholders would not be in any worse position under the 51 per cent. arrangement than they are today.
It has been argued by the Government that 51 per cent. would not give complete control because certain provisions in the Companies Act and the articles of association to the various companies require more than a 51 per cent. vote on certain occasions. It would be the easiest thing to put into any Bill that this provision would not apply in the case of the Holding and Directing Company with 51 per cent. ownership of the shares.
Again, debenture and preference shareholders have certain rights, mainly on the liquidation of the companies in which they have their debenture and preference shareholding. I hope that it is not suggested that this would happen to a nationalised steel corporation. The fear that their interests might be prejudiced has been used as an argument against me, and also that their votes might be used against the Government's intentions. This can be overcome by following the precedent of Cunard, where one Government share out-ranks all the other shares when it comes to a case of being taken over by a foreign interest. We could have one Government or preference or debenture shareholding in each company which would out-rank all the others in voting rights.
It is said that a 51 per cent. scheme might involve dangers, for the Bill would be hybrid. I went into that point very thoroughly with the authorities, and, de-

spite anything that the Government may say, my advice from the authorities is that there is no more danger of the 51 per cent. scheme being hybrid than there is of the 100 per cent. scheme being so.
The advantages of such a scheme would be tremendous. Instead of obstruction or apathy from the industry, there would be full co-operation. It would be something very different from what we are getting today, and I have found that a substantial body in the Iron and Steel Federation, although I do not say that it welcomes the proposal, would accept it as a permanent settlement. These people think that it will work, and if they, with all their experience in the industry, think that it will work, I do not see why the Government should not think that it will work.
In that case, the Conservative Party would not seek to unscramble the industry if it was returned to power, because it would become the doctrinaire party which was forcing on the public an unnecessary and boring argument. [An HON. MEMBER: "That would not worry it."] It would, because the Federation would not give the Conservatives any more money, so they would be that much less able to fight their election campaign. Once the Federation agrees to a proposition, that is the end of the argument as far as the Conservative Party is concerned.
I see the right hon. Member for Enfield, West smiling. He knows that that is true. I know that it is true. We all know that it is true. As he said this afternoon, if the Conservative Party got back into power it would unscramble 100 per cent. nationalisation, and I am afraid that that is not as difficult to do as people suppose, because the works are there in their individual places, and they can always be regrouped in some other way.
Under my scheme steel would at last be taken out of politics and we would never have to rehearse again all the dreary nationalisation arguments for, or against, which, I am afraid, if we go on with this plan, we will be engulfed in at the next General Election. Such a scheme would have a far easier passage through Parliament. It is true that the Liberals might not vote for it, but I have a feeling that they would not actively oppose it, which would give the Government's


majority a somewhat healthier look, and the Government could continue freely in office for as long as they wished.
The easier passage through Parliament of a steel Bill of the kind that I have mentioned would interfere far less with our parliamentary programme. It would not get in the way of such vital measures as the Land Commission Bill or the Leasehold Reform Bill. It would get an upsurge of support in the country from the middle of the road voters, from up-and-coming young executives, and the sort of people whose support we need. Something positive and useful could be done about the steel industry. I fear that the proposed Bill may never be carried at all, and the steel industry will be left as it was when the Government came to power.
Today's Gallup poll shows how harmful this old-fashioned steel nationalisation is to our prospects, and I beg my hon. Friends not to shrug it off, because they do not shrug off Gallup polls when they go the other way. I know that my right hon. Friend the Prime Minister is a student of Gallup polls, and I hope that he got the message this morning.
An approach along the lines that I have suggested would lift the argument out of its rut and give steel an exciting imaginative new look. Instead of steel being the last of the nationalisation bogies that weigh us down—and I believe that it was largely responsible for the cataclysmic drop in our majority between 1945 and 1950—it would be the first on the list of modern relationships between Government and industry. It would set a precedent for fruitful advances.
If we go ahead with the Bill based on the White Paper, we are asking for defeat at the next election. Today's Gallup poll, which shows a dramatic swing from an 8 point lead for the Labour Party to a 2 point lead for the Conservative Party, is the most alarming that I have seen for a long time, and it has come about since the nationalisation paper was published. If we try to force through a Bill on these lines during the next year, I think that it will be very difficult for us to make a recovery.
I beg the Government to think again and not press on with this suicidal course. There is no urgency to nationalise or to act on steel at the moment. As my right hon. Friend

pointed out, we have all the capacity that we need until 1970 to fit in with my right hon. Friend's economic plans.
The Government say that it is in the election manifesto and that we must fulfil our pledge. I respect that. What is in the manifesto is a statement that private monopoly in steel will be replaced by public ownership and control. I believe that my 51 per cent. scheme would fully meet that pledge, both in ownership and control, especially as it would give the new authority—as will not be the case under the Government's proposals—the right to acquire 51 percent of any other firm, should it think it necessary. My scheme certainly meets the terms of the manifesto just as much as does the Government plan to take over 100 per cent. of 14 firms while leaving over 200 in private hands, and taking away from those 200 the controls which are exercised over them today.
To make my position clear—I first advocated in public my 51 per cent. scheme in that very respectable journal the New Statesman and Nation, in January, 1962. I have the support of my local constituency party for my scheme. I told voters during the General Election, who asked my views on steel nationalisation, precisely what those views were and what I would try to do about it. I mention this only because it has been suggested in some quarters that in some mysterious way I sailed under false colours at the last General Election. I did not. I made my views clear.
I now come to the most painful part of what I have to say—my position at the end of this debate. Again and again, as my right hon. Friends the Prime Minister, the Chief Patronage Secretary, and the First Secretary know, I have made it clear, ever since the beginning of this Parliament, that I cannot, in conscience, support the old-fashioned nationalisation of the selected companies. I have said it again and again. They have known it all along. I must assume that they have taken it into consideration when making their plans. If anything goes wrong in the Division tonight it is as much their responsibility as it is mine. [HON. MEMBERS: "Ridiculous!"] I hear some of my hon. Friends saying, "Ridiculous". They have known exactly what the position was from the beginning of this Parliament. They have chosen the course.

Mr. Sydney Silverman: Is it their responsibility because they do not allow my hon. Friend to dictate to them?

Mr. Wyatt: My hon. Friend the Member for Nelson and Colne (Mr. Sydney Silverman) has spent most of his life trying to dictate to the Government. Why should I not? [Interruption]. If I am interrupted I am bound to reply. My right hon. Friend the First Secretary has explained that he is a very dangerous animal and that he reacts when he is attacked. So do I. I am trying to explain something which is very difficult for me. It is a very grave moment in my life, even if it is not in the life of my right hon. Friend.
I do not believe that if the Government are defeated in this vote tonight on the White Paper they have to resign. I do not believe that this is an issue of confidence. It would be quite easy to have a vote of confidence tomorrow or on Monday, in which I would gladly and joyfully vote for them. But if I am told that we can never vote against the Government because if we do there is always going to be a General Election, what is this House for? [HON. MEMBERS "Hear, hear."] I notice hon. Members opposite applaud that statement, but they would not applaud it if the rôles were reversed. This is something that is often said but it rarely happens.
I do not believe that the Government will resign if they are defeated on the vote on the White Paper tonight, unless they have already decided that they want a General Election. The timing I am happy to leave to the Prime Minister; indeed, I have to, anyway. I do not believe that there will be a General Election if the vote goes wrong for the Government tonight, unless my right hon. Friend has already made up his mind to have one. But I do not think that it is right to say, by way of blackmail, that nobody can ever stick to his conscience and principles, because the Government will resign if he does.
I have taken up this attitude because I am utterly convinced that the Labour Party—in which I have spent all my adult life—and the Government will destroy themselves on this rock if they are not somehow stopped. I am trying, somehow, in some way, to do that. I know that

many of my hon. Friends agree with me about this. I do not think that anybody would deny it. I believe that if there were a free vote tonight this White Paper would have no chance of being carried. The country does not want this old-fashioned type of nationalisation. The majority of Labour supporters do not want it to be given priority. In its heart, the majority of the House does not want it.
If a steel Bill is introduced on lines which are no different from those laid down in the White Paper, I shall have to vote against it. I must say that quite clearly now. Whatever the consequences to myself, I shall have to do it, because it is the only way I can think of which has the slightest chance of saving the Labour Party from disaster. But today we have not got the Bill in front of us. We are voting only on the White Paper. I shall not vote against it, but so far I have heard nothing which makes me think that I can vote for it.

7.35 p.m.

Colonel C. G. Lancaster: The hon. Member for Bosworth (Mr. Wyatt) will be the first to acknowledge that he had a very fair and patient hearing from a large House, which hurried in anxious to hear what he had to say. I do not think that those who hurried in were in any sense disappointed when they heard his robust, sincere and courageous speech. If I do not agree with every word he said, that in no way detracts from the general standard that he set himself, and the arguments that he adduced.
I have little to say this evening, other than that I happen to have had the invidious experience of having twice been nationalised—first in coal and subsequently on the iron side of the steel industry. On each occasion I worked for some months for the respective boards, but I found that I was contributing very little in view of my feelings about nationalisation, and I resigned. But between the wars I had opportunities of studying heavy industries both in this country and abroad. I did so in America, the Ruhr, Lorraine, Holland and France, and for a number of months in Russia. I was invited by the Russian Government to carry out a review of their heavy industries in the Donbas, in the Ukraine, and I learned a good deal on that occasion


about nationalisation as seen through Russian eyes.
More recently, since its inception I have served on the Select Committee on Nationalised Industries, and there are one or two matters to which I want to refer in that connection. It is not always recognised that the Select Committee is not only an all-party Committee but that it has to date made unanimous recommendations. That is its strength. There are two things which have been borne in on my mind throughout my many years' work on that Committee.
First, taking whatever public board one likes—whether it be connected with the railways, B.O.A.C., electricity, or anything else—in no case does one come across the type of dynamic, imaginative leadership which I feel to be essential—as my right hon. Friend the Member for Guildford (Sir R. Nugent) explained very cogently—for the success of those public hoards. Nor indeed do I consider that they do attain to the highest degree of industrial efficiency. The chairmen, who are the mainsprings of their organisations, are, as is to be expected, men who in certain cases are very successful and of first-class ability. In some cases they are God-fearing and hard-working but perhaps not of the highest calibre. In a number of cases they have been altogether unsatisfactory and inefficient. The deplorable aspect of it is that in no single case has one of these inefficient chairmen been asked to resign. That is one of the most cogent reasons to be produced against a system of nationalisation.
Almost 20 years ago I made a speech which lasted almost an hour—I am going to speak for about five minutes today—during the Second Reading debate on the Measure to nationalise coal. I asked what was likely to be achieved by nationalisation. I asked, would the nation have a sufficiency of coal for its requirements in this country and to sell abroad at competitive prices, and would the industry go ahead and show itself to be in the forefront of the world in its technocracy and the like? During the subsequent years I hope that I have shown myself to be a friend of that industry, but I could not put my hand on my heart and say it had achieved that objective. If we are foolish enough to nationalise steel, I do not think that we

should be able to say that in respect of that industry either.
Twenty years ago coal was the most important industry in this country. Today its place has been taken by the steel industry. Steel is important not only as a raw material but as an ingredient in some 54 per cent. of our exports. Today's decision is not a domestic decision. It is being watched in America, in South America, in Western Europe and in Japan. I believe that people there are wondering whether we are losing our senses—I do indeed. The irony of the situation is that the decision will rest in the hands of one or two hon. Members opposite. If they stand by their convictions and act with the courage with which the hon. Member for Bosworth has acted the future can be secured. Otherwise, this is an evil day for England.

7.43 p.m.

Mr. Michael Foot: I usually do my best to follow the previous speaker, but the hon. and gallant Member for South Fylde (Colonel Lancaster) will perhaps excuse me if I do not do so on this occasion. Perhaps I could apply the same principle to the right hon. Member for Enfield, West (Mr. Iain Macleod). More interesting speeches at least have been delivered since his, and I should like to make my comments on some of them, but first I wish to say a word on the subject of compensation, and the figure of compensation. It has not figured very prominently in this debate so far, but I am sure it will figure much more prominently when we have a debate on the Bill.
I agree very largely with the Amendment on this subject put down by my hon. Friend the Member for Poplar (Mr. Mikardo. I wonder why the Government have decided to fix the compensation figure in advance. I think it is contrary to the precedent that was followed in the previous nationalisation Measures when the figures were settled after debates had taken place in the House of Commons. My criticism is not concerned only with the scale of the compensation—which I think we on this side of the House would like to get lowered—but also because it appears that the House of Commons is partly deprived of the capacity to influence the final verdict. I hope that is not the case and that we shall be able to influence it. But if it is proved the case,


and the Government say, "We have fixed the figure and that cannot be altered at all," I think that interferes with the rights of the House of Commons to influence such a major part of the scheme.
Having said that, may I say that I greatly welcome the White Paper and the decision of the Government to proceed with the Measure. I congratulate them on their courage and their determination. I am quite sure that if they maintain these qualities, they will be able to get a Measure on the Statute Book to the great national advantage.
I should like, first, to comment on the speech of my right hon. Friend the Member for Vauxhall (Mr. Strauss). It seemed to me that he put a more powerful case against the Government's proposals than did the right hon. Member for Enfield, West, but my right hon. Friend put his reasons for having changed his mind—since the time when he was in the Government before and dealing with this industry—on very curious grounds. He, apparently, seeks to persuade us that the industry has greatly reformed in these years and that it is a very different industry with which we have to deal. I do not know what is the evidence for this. What we do know is that after 10 years under the kind of provisions made by the previous Government the industry, almost to the very end, and just before the General Election, was condemned as having conducted a price policy contrary to the public interest. That is one of the pieces of evidence of how the industry has reformed itself during this period.
Then there is the evidence—which I thought that my right hon. Friend the Member for Vauxhall brushed over easily—of how the industry has been expanded during this period. My right hon. Friend said that there had been many more requests to the Iron and Steel Board for expansion than there had been times when it was necessary for the Board to prompt the industry; that there was a change in the situation; that the industry had become expansionist. There was only one prime example contrary to this when there was a difference between the Iron and Steel Board and the industry on the question of a major expansion which took place at Llanwern. That is incomparably the biggest piece of expansion in the whole of the 10 years. So on the evidence of my right hon. Friend,

in the whole period of the great reform of this industry, on the major project of expansion in the whole decade, the industry was against it. How can it be said that, somehow, the industry has reformed and become expansionist?

Mr. Strauss: My hon. Friend will agree, despite the difference of opinion, that in the end, with the very inadequate control exercised by the present Iron and Steel Board, expansion did nevertheless take place?

Mr. Foot: I will come to that. I am seeking to deal with the argument put by my right hon. Friend, who said that the industry had greatly reformed and changed its character and therefore we could deal with it more kindly than he did when he was in charge. I have shown by the price policy that that is not so. I know that the industry is forcing itself to reform under the decision of the Restrictive Practices Court. On the second matter, where my right hon. Friend claimed that the industry had become expansionist, I was seeking to show that on the major piece of expansion which has taken place, the industry was opposed to it. There has been a change in the atmosphere generally about expansionist policies and some may have filtered through to the steel industry, but in the main there has been no great change. It was only by State policy that a major expansion programme in the industry was undertaken during this period.
My right hon. Friend is extremely innocent in suggesting that we should have a Board with greater powers which would be able to deal with the industry. He believes that it could tell the individual sections of the industry what they should do and, if they did not, we should take them over. The industry does not work like that, and the Iron and Steel Board does not work like that. One of the troubles with the Board, in view of the qualifications of many of its members, is that the industry has controlled the Board much more than the Board has controlled the industry. The interlocking situation of the directors is that the Board was always under pressure from the far more powerful Iron and Steel Federation and, very often, decisions of the Board were made illicitly by pressure from the much more powerful organisation outside.
Therefore, the idea that one is able to change the whole character of this industry—which has not reformed itself during this period—by slightly strengthening the Board and giving it more sanctions on the industry, as my right hon. Friend has described, shows, I think, his complete innocence about the nature of the industry and the people who control it. This is the major reply to my hon. Friend the Member for Bosworth (Mr. Wyatt) as well, who thinks that one can control the industry merely by having 51 per cent. of the shares with a strengthened Steel Board over it. This is not the nature of the animal; this is not how the Iron and Steel Federation works. I am sorry that my hon. Friend the Member for Bosworth is not here. I should much prefer to say the things which I am about to say to his face—

Mr. Desmond Donnelly: It seems that my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) cannot give my hon. Friend the Member for Bosworth (Mr. Wyatt) absolution from the calls of nature.

Mr. Foot: If that is the reason for his absence, I should be very happy to wait for a few minutes.
The solution of my hon. Friend the Member for Bosworth is a different variation of that of my right hon. Friend the Member for Vauxhall, but it suffers from the same defect, in that they both think that the steel masters will behave in a much kinder and milder way than these gentlemen have shown themselves likely to do in the past. I would say to my hon. Friend the Member for Bosworth on this aspect that he is too simple. He seems to believe everything which everybody tells him, whether in Russia or in Italy or by the Iron and Steel Federation. This is a very strange proceeding. My hon. Friend the Member for Bosworth is able to come to the House and give us the assurance that the steel industry would be willing to co-operate with his plan. They would approve it.

Mr. Donnelly: He did not say that.

Mr. Foot: He said that he could give the assurance to the House that he was quite certain that they would co-operate.
I wonder how he knows. Who told my hon. Friend the Member for Bosworth that the steel masters would be happy to co-operate in his scheme—

Mr. Donnelly: Under pressure.

Mr. Foot: Very well—who told him that they would be ready to co-operate under pressure? Who told him? That is the important part of my sentence, not the other part. Some people in the Iron and Steel Federation told him, of course. That is why he is able to say it with such authority. He does not have this in writing—they are not such simple people as that. They say, "Oh no. You go ahead, Woodrow. It would suit us very well." They want to have this White Paper defeated and if Woodrow has some cockeyed scheme for 51 per cent., that suits them fine. They are willing to tell him that it is brilliant. I wonder if they talked to my right hon. Friend the Member for Vauxhall. I do not suppose that they talked to him so readily, but if they did they would have said that his scheme was brilliant too. What about my hon. Friend the Member for Pembroke (Mr. Donnelly)? They would say that his scheme was more brilliant than anybody's. Of course. What they want and what the Iron and Steel Federation wants is not my hon. Friends' schemes: they want their votes.
Why should my hon. Friends be so simple? Again, I am sorry that my hon. Friend the Member for Bosworth is not here to hear me say this, but I cannot speak for too long. I know that my hon. Friend got his information from some of the steel masters, because of the outrageous lie which he disseminates about Ebbw Vale. There have been many people for years who have been going up and down the country saying that the Ebbw Vale Steel Works are to be closed. We get this scare every six months, and it is put out by some of the most sinister elements in the Iron and Steel Federation.
We had it last autumn. There was a declaration in the Sunday Times that it was absolutely certain that the Iron and Steel Board had made the decision that the Ebbw Vale works were to close down. It was printed as a matter of fact in the Sunday Times, with great headlines. There was not a word of truth in it. The Iron and Steel Board had reached


a quite opposite decision. The Government had a quite different view of the matter. But still the story goes on being peddled. Where does it come from? It comes from the same people who are telling my hon. Friend the Member for Bosworth that they would love to co-operate with his plan. It is a lie. It is a mischievous and shameful and callous lie to say that the steelworks are to be closed down. Every time it is said it sends a shiver of fear through a township which has had enough of fear and unemployment in its time.
So I say to my hon. Friend the Member for Bosworth that, whatever he says and whatever other tittle-tattle he brings to this House from the Iron and Steel Federation, he should not tell that story, nor should he give such pleasure to hon. Members opposite by retailing the selective facts put out by the Iron and Steel Federation about Richard Thomas and Baldwins. The figures which my hon. Friend gave and the implications which he drew from them are exactly the kind of material which is disseminated by the other steel masters, the competitors of R.T.B. Some of us think that politics can be rough in this House, but the politics of the Iron and Steel industry are infinitely rougher, yet my right hon. Friend the Member for Vauxhall talks as though they are a kind of international federation of mothers' unions. They are nothing of the sort. This is the toughest, bitterest, most vengeful vested interest in the country which spends more on Tory propaganda than all the Tory parties put together—

Mr. George Y. Mackie: Mr. George Y. Mackie (Caithness and Sutherland) rose—

Mr. Foot: I will give way in a moment.
This is the body which my hon. Friends were told can be controlled either by a slightly strengthened board or a 51 per cent. control.

Mr. Mackie: Perhaps the hon. Member for Ebbw Vale (Mr. Michael Foot) would tell us if these men—whom I understood to be technicians—have whips as well as top hats, and whether this old-fashioned image is true, however much it is pleasing members on the opposite side of the House.

Mr. Foot: I am not talking about the technicians in the industry—who, I am sure, would be very eager to work for the national set-up which my right hon. Friend has in mind—but about the politicians and financiers of the steel industry. If the hon. Member for Caithness and Sutherland (Mr. George Y. Mackie), way up in his distant part of the world, has not heard of them, we must show him what these beasts are like. They have claws. They have tried to squeeze the life of many parts of this country in the most desperate manner on many occasions. On each occasion that there has been a major effort to modernise the steel industry, the financiers and politicians of the steel industry have tried to stop it.
Before the right hon. Member for Enfield, West talks on steel, he should read something of the history of it. When Sir William Firth, before the war, went ahead to try to modernise the steel industry, the financiers and the accountants who are still in control of so much of it did their best to stop him. When Richard Thomas and Baldwins wanted to modernise the steel industry again in the 1950s and 60s—right bang up to date—they did their best to stop them. Why? Because it suits their profits. There is a fundamental clash between the interests of the profits of people in the steel industry and the national interest. It is a divergence which can be solved only by the Measure which my right hon. Friend proposes. That is why I think that it is a first-class Measure.
Another objection ventured by my right hon. Friend the Member for Vauxhall—and this probably applies to my hon. Friend the Member for Bosworth as well—must hold considerable attraction for the weaker spirits; perhaps I should say the weaker sisters since we have heard about our brothers and cousins. It has some appeal because we are told that it will take such a long time to put the Measure through. We are told, on the authority of The Times—and I do not deny that its political correspondent is very able—that the Measure could not go through and vesting day could not arrive before January, 1967.
While I agree that that is indeed a long time ahead, it allows for a year


during which the House of Lords would hold up the procedure. I thought that my right hon. Friend the Member for Vauxhall accepted that a bit too readily. I do not believe that the House of Lords has the slightest right to interfere with the Bill. It is clear, as my right hon. Friend the Member for Vauxhall and my hon. Friend the Member for Bosworth made clear, that this matter was discussed openly and abundantly at the General Election. The House of Lords should understand what is happening as well as anyone else. As I say, the House of Lords does not have the slightest right to interfere with the Bill.
Having said that, I agree that it is possible that the House of Lords might interfere, although it does not have the right to do so. If it does, I trust that it will mean the end of the House of Lords, We have had this once before. A Labour Government were denied the right to carry through their steel Measure on the previous occasion. That right has never been denied to a Tory Government. It having happened to us before, we are now told that the House of Lords might he willing to do it again.
This is an extremely serious matter and it perhaps indicates that, whatever dispute there may be between some of my hon. Friends about just what are the commanding heights, the House of Lords considers that this is one of them—this and Burmah Oil. I am not suggesting that any of my hon. or right hon. Friends who hold certain views are enticing the House of Lords to intervene and I am sure, for example, that if the House of Lords does interfere with this legislation my right hon. Friend the Member for Vauxhall will support us. Indeed, we might even have the support of my hon. Friends the Members for Pembroke and Bosworth. One never knows what luck one may get in the end.
If it is true that the reason why this Government should not and cannot proceed with a major measure for the modernisation and planning of the country—which is what we believe this to be—because it will take from an election in October, 1964, to a vesting day in January, 1967, and because the interval is so great that we must not do it, then I do not draw the same deductions as my

right hon. Friend the Member for Vauxhall.
I do not say that because of a delay of that length of time one must be a coward and run away. If one does that one should not imagine that that is the only thing from which one will have to run away. Why is the Opposition fighting the Measure—at least, showing signs of fighting it—with such determination? If hon. Gentlemen opposite persuade the Government to retreat, every vested interest in the country will be able to say, "We have only to turn on the screws and everything will be all right". If the Government give in to this kind of pressure they will destroy themselves.
We are told by my hon. Friend the Member for Bosworth that we will destroy ourselves if we go ahead with the programme which we put before the electors. I believe that we would most certainly destroy ourselves if we abandoned the field to those vested interests who, on two occasions, have twisted the constitution of this country to suit themselves.
If the House of Lords interferes with this Measure it will mean the end of the House of Lords. There will be some people who will fight it to the death. There will be some people who will strangle that institution for ever if it interferes. That knocks nine months off the programme, does it not? We are getting a bit closer.
Next we are told that, even with nine months taken off, it would still take quite a long time to reach vesting day. If we are in the situation that the Labour Government cannot carry through legislation of this nature—so urgently required in the Government's estimation and regarded for many years as being urgently required by the Labour Party—and if it would really take one and a half years or so to reach vesting day, then we will have to speed things up a bit. We will have to make Parliament work faster—modernise Parliament. [HON. MEMBERS: "Hear, hear."] I am pleased by that support. If we wish to sustain democracy in this country—and we have had some talk about that, too—we cannot have a situation in which a great political party, having won the election—and steel was in our programme—has its legislation


held up for this length of time. Incidentally, it should be remembered that we won three elections with steel in our programme, in 1945, 1950 and 1964.
If we are told that the constitution of this country and the paraphernalia of Government are such that this party cannot carry through our legislation over the opposition of the vested interests of the steel industry and the House of Lords, then democracy is dead because it is the same as saying that the people cannot get what they voted for. We say that the people should get what they voted for and it is with this in mind that I address my final words to my hon. Friend the Member for Bosworth.

Mr. Strauss: I agree with my hon. Friend's general argument, but he should get the facts right. What takes such a great length of time is the eight months proposed in the White Paper between the Royal Assent being given to a Bill and the setting up of the Corporation and then the year spent preparing plans for the modernisation of the industry. It is not so much a question of the House of Lords delaying progress to the extent mentioned by my hon. Friend.

Mr. Foot: I do not think that my right hon. Friend is being absolutely fair. He described the date, which he had taken from The Times. I understood that he was concerned with the constitutional factor. However, there is that other factor which the Government must take into account. It is that when the Steel Corporation is set up, that body will need to spend a certain amount of time in drawing up its plans. I agree that there is a great deal to be said for drawing up plans in that way, but if it is said that it will take that long, then perhaps we can set up a body which could work on this proposition at an earlier date. I should be only too happy if my right hon. Friend the Member for Vauxhall would move an Amendment in Committee to enable the Corporation to get into operation earlier.
It is essential, in the interests of democracy, that it should be seen that democracy is just as between one side and the other. We do not have such long delays when the Conservative Party is in office. Their Measures are easily passed through,

with the compliance of the House of Lords, whereas the Labour Government must fight every inch of the way against every vested interest, with every vested interest using the power it has on both sides of the House of Commons to try to distort the decisions of the House of Commons. That is the way to destroy democracy.

Mr. Eric Lubbock: The hon. Gentleman said earlier that the people of this country had voted in favour of the nationalisation of the steel industry. How is it that more than 3 million people voted against the nationalisation of the industry and for the Liberal Party?

Mr. Foot: The hon. Gentleman must understand that we do not accept in Britain the doctrine that one adds up the votes in that sense. The British people voted for a Government who said that they believed it was essential, for the replanning of the country, that the steel industry should be nationalised. These are the facts. The country did not vote for the Liberal Party in the last election. It seems that it is being suggested that the doctrine is apparently that the country voted for, alternatively, the Liberal Party's plan for steel, whatever that might be, the Tory Party's plan, to re-denationalise it however it may be nationalised, or one of the three schemes of my hon. Friends. Is it seriously suggested that the country voted for these mysterious alternatives rather than the one which was put plainly by the Government who were elected?
I was, earlier, about to address my final remarks to my hon. Friend the Member for Bosworth. I appreciate that it is extremely difficult to make a speech in Parliament in opposition to one's own party. Sometimes it is an extremely necessary thing to do—and, if I may say so, it may be necessary again at some time. Thus, when my hon. Friend spoke, I thought sincerely, I had some sympathy for him. He lost some of my sympathy when he retailed the accusations of the Iron and Steel Federation. He should not have done that. He should also have made it much clearer that his scheme was certainly not accepted by the Opposition. The official Opposition take a quite different view. There is no guarantee that his scheme would put this issue out of politics, as those brilliant Liberal reformers want to do. Indeed, the Liberals


want all the main issues of politics taken out of politics.
My hon. Friend the Member for Bosworth must, therefore, be criticised on that score. He then said that he had always taken that view. It is a matter of conscience and, of course, nobody can interpret one's own conscience except oneself. So I am not presuming to indicate to my hon. Friend what his conscience should say to him. He knows what it is saying much better than I do. He also said that he had made it clear before that he was always opposed to the public ownership of the steel industry in the sense in which the Government are carrying it through. He said that that had been made clear before the election.
If my hon. Friend had done that, then he would have every right—indeed it would he his duty—to oppose or abstain in the vote tonight. But he did not. I do not think that the Bosworth constituency Labour Party knew, before the General Election, that my hon. Friend's opposition to the public ownership of steel was so passionate and that he was so determined that he would be prepared to bring down a Labour Government on the issue. I do not think that he really said that he would be prepared to do that. What about my hon. Friend the Member for Pembroke? Did he say that he would be prepared to do that? I do not think that my right hon. Friend the Member for Vauxhall said it to his local constituency party. That is why he will vote with us. It is why those considerations should be taken into account by my other hon. Friends, because I do not believe that it would be possible for this Government to last very long if they lost the vote tonight. Any of my hon. Friends who thought that they could, and voted against the Government, would be deceiving themselves.
Even if the Government decided that they would not accept the decision of the House of Commons on this major subject—and it is a major one, as we have seen from the many statements that have been made—their authority would be greatly reduced. And if the Iron and Steel Federation is rejoicing today because of the support that it has among a few of my hon. Friends, what would be its rejoicing afterwards? How much greater would be its campaigning and

determination? What is at stake on this issue of steel is, therefore, the nerve of the Labour Government. It is a question of whether the Labour Government have the determination and resolve to deal with the most serious, powerful, malicious, vengeful vested interest in the country.

8.15 p.m.

Mr. Emlyn Hooson: The hon. Gentleman the Member for Ebbw Vale (Mr. Michael Foot) was, for most of his speech, beside himself, his favourite position in Parliament. Indeed, he is in great danger of becoming the scolding high priest of Socialist orthodoxy, smelling out deviationists on the benches opposite. It really is time that he left his world of nightmares and came down to the world of reality.
The hon. Gentleman spoke of the members of the Iron and Steel Federation, for whom I hold no particular brief. The Liberal Party has received no money from the Iron and Steel Federation, nor from any company in the steel industry.
The hon. Member for Ebbw Vale chided his hon. Friend the Member for Bosworth (Mr. Wyatt) for his friendship or acquaintance with members of the Iron and Steel Federation. I do not believe that, in the 'sixties, capitalists have horns, as the hon. Member seems to think. They are ordinary people, just like the hon. Member—[HON. MEMBERS: "No."] Even orthodox Socialists do not have to hide their children in cupboards against capitalists.
Hearing the hon. Member for Ebbw Vale, knowing his radical background and realising that today he is setting himself up as one of the most conservative of doctrinnaire Socialists, I reflected sadly that it is the converts who are the most orthodox and enthusiastic. The hon. Member said not a word in support of the White Paper; it was sufficient for him that the Government had to be supported at all costs.
I want to make it quite clear that my party is opposed—[Laughter.] Hon. Members can laugh, but if they think that they can ignore the centre vote in this country and get away with it they are making a great mistake—

Mr. Manuel: Go to the country on it.

Mr. Hooson: Let there be no doubt about the Liberal view of the White Paper—we are completely opposed to it. The Government will not go to the country on this White Paper—

Mr. Manuel: That is the last thing the Liberals will do.

Mr. Deputy-Speaker (Sir Samuel Storey): Order. I hope that hon. Members will refrain from these interruptions.

Mr. Manuel: On a point of order, Mr. Deputy-Speaker. I do not know whether you are aware that during the early stages of the debate my right hon. Friend, while introducing the Motion, was subjected to interruptions throughout—jeers and scoffing—but there was no reprimand for those responsible. The Liberals were amongst the worst sinners.

Mr. Deputy-Speaker: Order. The hon. Member must not criticise the Chair, and he will please be quiet now.

Mr. Manuel: Further to that point of order. I want to clear away any impression that I was in any way criticising the Chair. I was trying to point out that there had then been far worse interruptions from those who now object to being interrupted.

Mr. Deputy-Speaker: All that matters at the moment is that we should not have interruptions now.

Mr. Hooson: I have never in my life read a document that showed so much sign of conservative thinking as the White Paper. There is not a single new idea in it—and that should please the hon. Member for Ebbw Vale, who goes back for his beliefs to years ago and has a fixation on Ebbw Vale, and not a new thought in his head about how to reconstruct this industry.
I want to make clear the three grounds that are the basis of our objection to the White Paper. First, the proposal for the nationalisation of steel contributes in no way to the solving of the country's urgent social and economic problems. Secondly, the claim that we must nationalise the steel industry in order to achieve growth and efficiency is arrant nonsense, in the face of experience here and abroad. Thirdly, there are the most sinister implications about these particular

proposals for the nationalisation of steel contained in the White Paper.
The Government came into power on a very narrow majority just over six months ago, after 13 years of uninterrupted Tory rule. I think that they came into power because the people were fed up with Tory rule. They were anxious for reforms. They felt that the country was falling behind. People were, and are, calling out for schools, for new roads, for houses. They are calling out for the modernisation of industry. They are calling out for a complete change in our social system. What they are not calling out for is the nationalisation of steel.
No one should deceive himself that the motive behind this proposal for the nationalisation of steel is the interests of the country. Of course it is not. If the arguments in favour of nationalisation are right, why had every other item in the Labour shopping basket been jettisoned before the last election? In 1955, there was a long list of things to be nationalised; in 1959, a lesser list. Sugar, cement, chemicals have all been in the basket, and out again.
All that is left in the basket is steel? Why? Because steel constitutes a mystical and emotional block in the Socialist mind—

Mr. Peter Shore: Will the hon. and learned Member give way?

Mr. Hooson: No. This is the only Liberal speech tonight, and the Minister did not give way to Liberals at all.
The motive behind the White Paper lies in the fact that the Government are hostage to the doctrinaires and mystics in their midst. The Minister of Aviation once said that steel nationalisation was in danger of becoming the Monte Cassino of the Labour movement. It has become the mystic advantage point which they must take at all costs. They must get there, whatever the casualties. That is the attitude that has been taken.
The truth is that the Labour movement has shown that it is prepared to run a great risk of sacrificing the whole of its social and economic reform programme on the altar of nationalisation in order to achieve an emotional success over the Tories—

Mr. Manuel: Mr. Manuel rose—

Mr. Hooson: No, I shall not give way.
The Government are here hostages to their extremes. They know that they will not be able to keep the movement together unless they make a great attempt to take this citadel. [Laughter.] Hon. Members opposite laugh, but we have already had speeches from that side against the whole proposal. Other hon. Members opposite say that the compensation terms are too good. Where is the unity in the Labour ranks on this issue?
The Government will be judged in the country, not on nationalisation but on how they have matched up to the great modern problems of providing houses, schools and of making all the necessary and urgent changes in our social and economic life that we need; and on how the programme has been affected, how it has been jeopardised, by this move to nationalise steel. It is not that the nationalisation of steel is politically a great issue in itself in the country. People are heartily fed up with seeing steel knocked backwards and forwards like a shuttlecock over the political net. They are interested in the Government's sense of priorities, and in how the move embodied in the White Paper will affect the rest of the programme, and how much importance the Government attach to the emotional side of this issue.
The great importance of nationalising steel—

Mr. Godfrey Lagden: Mr. Godfrey Lagden (Hornchurch) rose—

Mr. Hooson: No, I do not intend to give way to anybody.
That is our first ground of opposition; that the real motive behind this proposal is an emotional mystic one. No one can give a rational argument in its favour. Not even the greatest nationaliser among them can say that it is one of the country's great problems, deserving a priority—

Mr. Mikardo: Mr. Mikardo rose—

Hon. Members: Give way.

Mr. Hooson: No, not to anybody.

Mr. Mikardo: I am not "anybody." Will the hon. and learned Gentleman give way?

Mr. Hooson: No.
I want to come to the next reason that is advanced. It has been said that our steel industry compares badly with that of the United States, Japan and Europe—and of Western Germany in particular. It ill-becomes the successors to a Labour Government which kept us out of the Coal and Steel Community in Europe in the first place now to criticise our steel industry in comparison with the European industry when, if the then Labour Government had had the foresight, our steel industry could have expanded within very much larger European markets.
None of the steel industries of those countries is nationalised. It is said that their steel industries are far in advance of ours. Is that by nationalisation? I repeat—not one of them is nationalised.
I accept that our steel industry is capable of a better performance. Like every other industry in this country, it can be greatly improved. But let us get the facts straight. Our steel industry compares at least as well, as most of our industries do, with the American industry, for example, in productivity. But to suggest that our country is falling behind other countries is no argument for nationalisation, because we can see that other countries have not achieved their pre-eminent position through State interference and nationalisation.
The third point is the money that is involved here. No less than £650 million have to be found for this nationalisation. It is true that the money is to be borrowed, but do the Government think it a good bargain from the country's point of view?

Mr. Mikardo: No.

Mr. Hooson: I agree with the hon. Member for Poplar (Mr. Mikardo) there.

Mr. Mikardo: That makes me wonder, for the first time, whether I was right.

Mr. Hooson: For the shareholders, it is fair compensation, for the industry is working reasonably well, but if the Government are to "muck about with it" and if we are to have the bureaucratic organisation we so often have in nationalised industries, it is a bad look-out for the country.
At present, £650 million are to be provided. When this stock is issued on the


market, what will happen? The gilt-edged market will be depressed straight away, and that means, inevitably, that interest rates go up. If people have the sense to look at where gas and electricity stocks stand at today, they will at once sell their new stock, and buy equities. There will then be inflation in the equity market. A great deal more money will be poured into the economy, and the whole operation will have an inflationary effect. Hon. Members themselves can work out how that will affect the path which the First Secretary is trying to follow at the moment of creating and preserving an incomes policy.
I want to move on now to the second ground of objection. That is the claim that the industry must be nationalised to make it efficient and to obtain growth. This claim—the White Paper gives no grounds to support it—does not bear examination for a moment. It is said that the industry is a monopoly. Is it any answer to a private monopoly to make it a public monopoly? The remedy is at least as bad as the disease. What is needed in the industry is a little more competition.
I accept that, because of the nature of the industry, it is impossible to get this competition, except within certain well-defined and narrow limits. An examination of the progress of the industry in other parts of the world—for instance, in Japan and in the United States—shows that there is now a tendency towards more competition in price. True it is a slow process. There is here too. It is only a few months since the Restrictive Practices Court gave its decision. It is up to any Government to see that that decision is enforced in the steel industry and that there is more competition within it.

Mr. Richard Buchanan: Mr. Richard Buchanan (Glasgow, Springburn) rose—

Mr. Hooson: No, I shall not give way.
If the Minister has his way, what will happen is this. The industry will be nationalised and there will be no chance of any competition, in prices or anything else, in the future. Prices will be completely frozen. The Minister's argument is no valid argument for the nationalisation of steel. If our experience

of the other nationalised industries is any guide, whatever their advantages or disadvantages the price always rises. [Interruption.]
The next reason advanced in the White Paper—and it was advanced today by the Minister—is that capital injection is needed to expand the industry and to produce growth and that this capital can be obtained only through the State. It is interesting to note that the only reason advanced by the Secretary of State for Education and Science, in his book, "The Future of Socialism", for nationalising steel was that no Government could depend on private enterprise to provide the necessary capital for expansion.
At the time that the Secretary of State wrote that, there was a shortage of steel in the world and in this country. Now there is a buyers' market. There is surplus steel production in the world. If it were not for the 15 per cent. surcharge, our mills would all be working short-time at present. They are working to near capacity because imports are restricted at the moment. Great injections of capital for expansion are not needed, because, if home production were expanded to any great extent now, we should be asking for trouble.
One of the real problems of the industry compared with the American industry is that we do not produce enough per head. Also, the quality of our steel needs to be improved. Redundancy is the greatest single problem in the industry, and we all know that. Seven thousand workers at the Steel Company of Wales' plant at Port Talbot are said to be redundant out of a total of 17,000. They are industrially redundant. The work can be done by the remaining staff. This is a tremendous human problem. No Government, neither the Tory Government nor the Labour Government, have yet faced up to the great problem of how to get a proper redundancy and retraining scheme. [Interruption.]
How will the nationalisation of the industry assist here? The United States of America and Western Germany have tackled this problem in a very much more robust way than this country has. No single argument is adduced in support of the proposition or suggestion that it would be easier to deal with this problem if the industry were nationalised.
The claim that efficiency will be improved if the industry is nationalised is completely unwarranted. The other day the Financial Secretary said that if the industry were nationalised it could use more computers. One-third of the on-line computers either in use or on order in British industry are in the steel industry. This compares with one-fifth in the United States and one-sixth in Europe. [Interruption.]

Mr. Deputy-Speaker: I hope that the House will refrain from these disorderly interruptions.

Mr. Paul B. Rose: On a point of order. The hon. and learned Member for Montgomery (Mr. Hooson) seems to have imposed a unilateral embargo on interventions.

Mr. Deputy-Speaker: Order. That is not a point of order.

Mr. Hooson: The truth is that hon. Members opposite are not prepared to listen to the opposite view. [Interruption.] This is the only Liberal speech which will be heard this evening. I am not prepared to have it punctuated continually by interruptions.
I return to the question of computers. It is suggested, apparently, that more computers would be used in a nationalised industry. I have pointed out that at present this industry has more computers in use than any other section of British industry. Does this show that it is behind? Of course not.
Then there is the ludicrous suggestion made in the White Paper that there can be a centralised selling organisation with computers. It shows what a theoretical dream-world the Labour Party lives in. It is a buyers' market in steel and I am told by those whose duty it is to sell steel that very often buyers buy virtually according to their whims and fancies. They sometimes insist on having their strip from one particular mill and will not accept that strip from another, although of the same size and equally good. Let hon. Members imagine a buyer going to the Steel Company of Wales to buy and then being sent back to London to a central selling organisation, there to be told by a computer what he must buy and sell.
This theoretical claim that a nationalised industry will be more efficient is not borne out by experience in this country or abroad, and the very worst time for a Government to go into an industry is on a buyers' market such as we now have in steel. [Interruption.] No doubt some hon. Members opposite would like to end democratic debate in the House if they could.

Mr. Rose: Then why does not the hon. and learned Member give way?

Mr. Hooson: The White Paper contains some very sinister provisions. One which has already been mentioned is that the right is to be given to the new National Steel Corporation to diversify into practically anything it likes. This could be the octopus which could spread its tentacles to every branch of industry. It could virtually end competition in rival industries; it could buy off its competitors. It could move into plastics or anything else and it could be a means, as it has been described, of imposing socialism through the backdoor. I am totally opposed to this provision. There may be ground for some diversification sufficient for some vertical integration in the industry, but not the uncontrolled diversification envisaged in the White Paper.
Then there is the provision relating to those parts of the industry which are not to be nationalised. It is suggested that they have an important part to play in the future, but paragraph 37 of the White Paper continues:
In the interests of proper planning of the investment programmes of the industry as a whole, the Minister will retain a reserve power to control substantial development projects by the private companies in the basic fields of iron- and steel-making alone.
What does that provision mean?
If there is a truly enterprising company left in the private sector, with its directors using their imagination and talent to develop it in a modern way, and it threatens to challenge the nationalised sector of the industry, the Minister can prevent that development taking place. This scheme means taking over the 14 largest companies and saying to the remainder of the industry, "You are free to go, but you must not develop to the stage where you might show us up."

Mr. Mikardo: Has the House ever heard anything so childish? Has the


Liberal Party nobody better than the hon. and learned Gentleman?

Mr. Hooson: The Labour Party has been mulling over the problem of steel nationalisation for 13 years, and now that it is in power what is suggested is that Parliament should write a blank cheque for a Corporation to think up its own scheme for running the industry. It is the height of irresponsibility that a Government who, during the election, said that they had a scheme for nationalising the industry should have no scheme at all when it comes to the crunch and should propose to leave the matter to a body which is to have a year to work out a scheme.
We in the Liberal Party intend to oppose this scheme and the Bill which is to follow all along the line. [An HON. MEMBER: "Terrifying".] I warn the hon. Gentleman who says he is terrified that any party which ignores the middle vote in this country, and thinks that it can get away with it, is making a great mistake. In the present scheme the Government have shown no signs of rethinking. The late Hugh Gaitskell's battle on Clause Four might as well never have been fought. The Labour Party has come back to its old-fashioned doctrinaire heart, naively ignoring the fact that power in industry today is not in the hands of owners but is in the hands of the directors, the managers; the new élite. This is so whether an industry is nationally owned or privately owned, except in very small companies.
A great deal of Government money is to be wasted on this nationalisation scheme, and we are convinced that it is in the interest of the country that we should oppose it all along the line.

8.41 p.m.

Mr. Desmond Donnelly: The hon. and learned Member for Montgomery (Mr. Hooson) will not expect me to comment on all his speech, but perhaps I may be permitted to say this. This House is a debating chamber, and part of its tradition is that we argue with one another in the course of our speeches. It costs us nothing if we give way from time to time. It is coducive to the general traditions of tolerance and argument within the House. All I can say to the hon. and learned Gentleman is

that, if he wants to make speeches in future which are not subjected to a barrage of interruption, he really must learn to give way when reasonably asked to do so.
I thoroughly enjoyed the speech of my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot). I do not for a moment accept his strictures on my hon. Friend the Member for Bosworth (Mr. Wyatt). Whether one agreed with my hon. Friend's speech or not, I thought it was one of the best and bravest speeches I have heard in the House in 15 years, and I was glad to have the opportunity to be here today to hear it. I liked the speech of my hon. Friend the Member for Ebbw Vale because it was the best piece of thunder and gnashing of teeth that I have heard here for years. It was stage thunder and, I thought, false teeth. It was splendid comedy, Restoration comedy.
Perhaps I may begin my few remarks, which are not easy for me to make, by saying something about my general attitude to public ownership, then a few words about the White Paper, and, last, if time permits, a few words about the political situation involved in the White Paper.
First, public ownership. I myself have never been opposed to public ownership. I am in favour of public ownership where its serves the public interest. But it is not an end in itself, and there are many ways of conducting public ownership and organising it. There is not just one set pattern to be adopted. The general case, the original case, for public ownership, with which I am fully conversant, dates back to the harshness of the Industrial Revolution, to the irresponsibility of private industry, and to the effects upon the people in those industries, without regard to their general welfare and well-being. Basically, it was founded on the social irresponsibility of so-called capital industry in the last century and in the course of this.
That social irresponsibility, among the larger corporations in the world, is gradually diminishing. They are gradually becoming more responsible, and, as one goes about, one finds that the major industrial companies in this country, whether privately owned or State owned, are all equally socially responsible.
During the years when I have had the honour to represent my constituency, I have had to deal with a number of major oil companies. They are not necessarily indigenous in this country, but all I would say is that they are almost hypersensitive to public criticism, and they are certainly extremely socially responsible, especially towards their own workpeople. This is becoming a more general attitude. The larger the company, the wider its international reputation, broadly and generally, the greater its social responsibility. I do not think that anyone in the House will deny the general premise that firms like I.C.I. or British Petroleum are extremely socially responsible.
If that reason for public ownership has diminished or is in process of diminishing, the argument in favour of public ownership passes to another field, to economic planning and industrial efficiency, which, of course, are essential for this country. We must get absolute value for every £ invested in our industry in the years to come if this country is to be made viable. It is a fact that there has been a misapplication of national investment in recent years, or a lack of investment, and this is largely responsible for the problems confronting our economy today. So, as I say, one moves to the economic planning and industrial efficiency aspect for the case for public intervention or public ownership in industry.
This brings me to the question of how to do it. There are practical problems of management which go with questions of size. Anyone who has had any responsibility for seeing to the management side of major industry and the practical questions involved realises that there is the major problem of the men at the top being able to assimilate the details of the work and conditions of men on the job. It varies from industry to industry, according to the complexity of the job, but, nevertheless, the problem is always there of how the men at the top can assimilate the details of the men at the work benches and how things are going. Once they cease to assimilate these details, the efficiency of the industry begins to lag and to sag.
This is the problem to which we, on whichever side of the House we sit, must address ourselves when we think about the management of the steel industry in

this country. It is not necessarily the commanding height, but it is an important height. It was once the commanding height, but it is not any more. As we all know, oil and chemicals are much higher, almost double in terms of capital formation, which is a big difference in the balance of our investment. We must think of this management problem and of assimilation at the top in terms of steel.
In the end, this come down to a question of bigness. That brings me to the provisions of the White Paper. I greatly regret the decision of the Government to proceed with this plan of centralised ownership. I regret it, first, because of industrial efficiency. I regret it, too, because I think that it will lead to a large number of problems in the conduct of the industry in relation to price and efficiency arrangements and to research and management relations.
The fact is that there are far too many small firms in the industry. I do not deny this. Even the largest firms may not be big enough—I accept that, too—and we may need to look towards bigger units. There is, however, an optimum size for the effectiveness of a unit of this kind. I should have said that rather than have one State corporation managing the whole industry, we should think in terms of three or four corporations. They need not necessarily all be State-owned. One might be and three might not be, or three might be and one might not be. It is, however, essential to have a spirit of competition, to have freedom for the men in the industry so that if they disagree with the policy of one corporation they can go to another and still fulfil their working lives. What we must not have is a monolithic industrial structure which ceases to make the best use of our indigenous skills and management abilities. This is the essential weakness of the White Paper in its whole concept and structure.

Dr. Bray: I seek to intervene during my hon. Friend's speech following his suggestion concerning the value of discussion, with which I am sure the House would agree. In dealing with whether we should have one organisation or many, would he not agree that each of the separate corporations which he envisages would need to have blast furnaces?
Would it not be sensible to have these serviced by a common research and supply organisation? Can my hon. Friend really maintain his argument?

Mr. Donnelly: It is not necessary to have all the research services centralised. Indeed, it might be a good thing to have two or three research services operating on a scale of that size. If the researchers, for example, quarrel with their boss, they must have another job to which they can go. We must not have a monolithic organisation in research any more than in industry.

Mr. J. B. Symonds: Why does not my hon. Friend cross over?

Mr. Donnelly: My hon. Friend should not say that, because he will need my vote tonight. [HON. MEMBERS: "Oh."] My hon. Friend should not interrupt at this stage. He must realise that I am trying genuinely to apply myself to the problems.
A second facet of the problems raised by the White Paper is the rationalisation of the industry itself in its labour relations and the number of people employed. I accept that far too many people are employed in the steel industry. This is a cardinal point in favour of rationalisation. But how are we to deal with this problem in the immediate future of the next two or three years? At the very best estimate, it will be at least two years before the industry has its future resolved. At the worst estimate, it might be three or four years and it will run into the next Parliament.
For the workpeople, this rationalisation process must be started as soon as possible. It needs to be started now in the national interest. It is not being started because of the uncertainty which hangs over the industry. This is why I regret the long-drawn-out procedures of the White Paper. This is the worst kind of procedure, because uncertainty is the worst kind of industrial partner to have anywhere. It destroys confidence on the shop floor and in the boardroom. This aspect of the White Paper will be a real problem.
That brings me to the third part of my remarks and to the general political situation and the philosophy that underlies my concern at the White Paper. I absolutely

agree that public ownership of steel was included in our election manifesto. Nobody said in that manifesto that it had to be implemented during the first year. Nobody said that it must take priority over the national economy or over housing, rents and all the other manifold problems to which my right hon. Friend the Member for Vauxhall (Mr. Strauss) has referred. Nobody said that it would have to have that priority.
I question the whole basis of the priority of this proposal today. The national interest comes first. Once we have our economy right, once we have our ship of State steady, we then have an opportunity to argue about the merits of public ownership of steel. At this stage, however, with one wobble on that ship of State we should be in a serious situation. Behind that lies the practicalities of our narrow Parliamentary majority. This is a very real matter for hon. Members on both sides.
It was said by various hon. Members in the course of the debate that we did not have a mandate to nationalise steel. It was said, too, that we were in a minority of 3½ million votes in the country. There is some semblance of truth in this argument which we must examine. I believe in the long tradition of Parliamentary democracy in this country. I believe that Parliamentary democracy functions and operates only as long as people are prepared to abide by the general consensus of national opinion.
I believe, too, that one of the most remarkable things in the whole history of this country was not that we decided to fight on in 1940—it never occurred to us to do anything else, and it may be that we were stupid—but that we decided to fight on under a Parliamentary democracy. The spirit of that Parliamentary democracy operated in this House although the Government had an overwhelming majority. Throughout the years the House of Commons and the Governments of the day have been able to secure the public acceptance of their Measures only when they have had the general consensus of national opinion behind them on major issues of this nature.
If we had a majority of 3½ million in the country and if we had a majority of


200 in the House of Commons, I would take a different view. But I am a democrat and I believe in the fundamental principle of Parliamentary democracy which lies at the whole root of our society here in this country.
That brings me to the crucial point. I think that the proposals are wrong. I think that they are wrongheaded. I think that the priorities are wrong. I join with my hon. Friend the Member for Bosworth in saying that, whatever may be the difficulties, whatever may be the doubts and fears in the years ahead, we consider that our national interest at least was to insist that this should not have absolute priority over other things, and we consider that this must not be the last word in this pattern of public ownership.

8.57 p.m.

Mr. Anthony Barber: This has been a remarkable debate, for a number of reasons. Whatever the outcome of tonight's Division may be, these are the facts. I am bound to say that I am surprised that the right hon. Member for Belper (Mr. George Brown), who is to reply to the debate, is not merely not here to listen to the winding-up speech from this side of the House, but was not here to hear the speech of the hon. Member for Pembroke (Mr. Donnelly).
The facts are these. First, the Government's proposal to nationalise the steel industry was rejected by a majority of those who voted at the General Election only six months ago. Secondly, always assuming that when he gets here the Secretary of State for Economic Affairs, unlike so many of his hon. Friends, has actually made up his mind on the White Paper, by the time I have spoken and he has spoken and the Division is called, there will have been in favour of the White Paper four speeches and against the White Paper nine speeches—

Mr. Frederick Lee: On a point of order. May I put it to you, Mr. Deputy-Speaker, that this is a direct criticism of the Chair? May I submit that in his computation of those who have spoken for and against the White Paper the right hon. Gentleman has included three of my hon. Friends whose views were known before the debate began to be in opposition to us?

Mr. Deputy-Speaker: I did not think that the right hon. Member for Altrincham and Sale (Mr. Barber) intended to criticise the Chair. [Interruption.] Order. If anybody wishes to criticise the Chair, he must take the proper course and put down a Motion.

Mr. Barber: Of course I was not criticising the Chair, but stating the facts. I may say to the right hon. Gentleman that for most of the time during the course of the debate it has been far more like a continuation of the Labour Party meeting.
At any rate, whatever the strange quirks of conscience which may guide some hon. Members opposite when the Division is called at ten o'clock tonight, the fact is that the majority of hon. Members are opposed to the Government's proposals. Because the right hon. Gentleman the Prime Minister and his colleagues know that this is the case, they have resorted to the squalid device of taking the debate on the last possible day before the Conservative Member for Birmingham, Hall Green, may take his seat and vote. [Laughter.] Hon. Members opposite can snigger, but although this sort of action may commend itself to the Parliamentary Labour Party the nation will see it for what it is.
That is not all. The Government, for obvious reasons, simply dare not bring in the Bill to nationalise steel without first knowing the outcome of this preliminary sortie on the White Paper. In the debate on the Queen's Speech the Secretary of State for Economic Affairs talked of debating the Bill. There was not a whisper, when he spoke on the last occasion, of any White Paper, for the simple reason that the ploy had not then been devised.
If I might give him a little advice it would have been better to prepare his speech before he arrived. [Interruption.] Of course, we all know—[Interruption.]—from the election manifesto that the Labour Party was ready and poised to swing its plans into instant operation. The right hon. Gentleman and his colleagues have now been in office for six months and in the Ministry of Power—[Interruption.] If hon. Gentlemen shout, all I will tell them is that I shall make my speech and there will be less time for them to reply.
The fact is that in the Ministry of Power and through the British Iron and


Steel Board the Government have all the information they need. The truth is that the Bill is ready, but the party managers are not. So we are presented with the subterfuge of a White Paper. The Minister of Overseas Development was not far off the mark when she told the House last year, "We are not always motivated by the purest and most undiluted of motives." I think that she had a point.
The Minister of Power, in his opening speech this afternoon, mentioned the fact that shortly after taking office the Government had offered to have constructive discussions with the industry. As my right hon. Friend the Member for Enfield, West (Mr. lain Macleod) said when he followed him these consultations were, in fact, a farce, a mockery. This was because it turned out that the Government wanted the help of the industry itself to see the implementation of a rigid policy of old style nationalisation—what the right hon. Gentleman and his right hon. Friend, the Member for Vauxhall (Mr. Strauss) called the old orthodox solution. For 20 years, as the right hon. Gentleman the Member for Vauxhall said, the steel industry has been the subject of perpetual controversy and if the Government had only agreed to sit down and consider a long-term solution, which would have taken the issue out of the political arena, then the industry would have been the first to co-operate.
But that was out of the question and the House tonight is asked to pronounce on a policy that is as hackneyed and out-dated as Clause Four itself. What are the reasons which have prompted the Government to make this proposal? The Minister of Power had the nerve this afternoon to refer to the capacity of the steel industry. Is he really suggesting that the capacity of the steel industry is not sufficient? Certainly, anybody with the slightest knowledge of the industry could not suggest that. As the right hon. Gentleman the Member for Vauxhall said, the industry has proved itself expansion-minded to a remarkable degree.
My right hon. Friend the Member for Enfield, West dealt this afternoon with the matter of capital investment. It is a fact that if one takes a period from the Iron and Steel Act, 1953, to the present

time the capacity of the industry has increased from just over 18 million ingot tons to over 30 million ingot tons. It is not at all surprising that in the White Paper itself the right hon. Gentleman states in terms
… adequate capacity has now been created to cover requirements for some years ahead …

Mr. Lee: Mr. Lee indicated assent.

Mr. Barber: The right hon. Gentleman nods. Perhaps he will explain why, on the very next page of the White Paper, he describes the first objective of nationalisation as being a national programme designed to ensure adequate capacity.
The hon. Member for Ebbw Vale (Mr. Michael Foot), who entertained us so delightfully, took issue with the right hon. Member for Vauxhall and said that the industry had not been expansion-minded. I ask the hon. Gentleman to pause for a moment to consider what happened when the industry was previously nationalised. The nationalised Iron and Steel Corporation—[Interruption.] I am talking about targets. If the hon. Member would only listen, he would learn a little more. The nationalised Iron and Steel Corporation set a capacity target which was way below what was necessary and which, thank goodness, in the national interest, the industry ignored once nationalisation was out of the way. I am sure that the Minister of Power must know this fact. He cannot deny it.

Mr. Michael Foot: The right hon. Gentleman is referring to expansion. Would he deal with the point with which none of his hon. Friends dealt? Is it not the case that in the whole of the 1950s the major expansion was undertaken by the publicly-owned firm against the advice of the private steel masters? Does he not draw any deduction from that fact?

Mr. Barber: I draw the obvious deduction which any fair-minded and objective person would draw, which is that from time to time there are serious differences of opinion both within the industry and between the industry and the Government about what the capacity should be. But may I ask the hon. Gentleman—[HON. MEMBERS: "Answer."]—whether he would agree with this, that


if the capacity target set by the nationalised Iron and Steel Corporation, which was 20 million tons by 1957, had been accepted, it would have trebled the import bill for 1957 if the industry had not taken a different course?
We were told by the Minister of Power today that the performance of the industry is poor. We were told that it is inefficient. My right hon. Friend the Member for Enfield, West gave the facts. I will add only this, for the Minister's benefit. Nobody would pretend that in an industry comprised of more than 250 companies, operating in more than 300 works, there are not faults and shortcomings. Of course, there are faults and shortcomings in the industry. [HON. MEMBERS "Hear, hear."] It is all very well for hon. Members opposite to say, "Hear, hear." The trouble with them is that they are always delighted to hear anything adverse to British interests. They remind me of the immortal words in "The Mikado":
The idiot who praises with enthusiastic tone,
Every country but his own.
Just as, last autumn, the First Secretary of State and his colleagues selected every adverse factor in our economy which they could lay their hands on, embellished them with the trappings of Transport House and proclaimed them to the world with the disastrous consequences of which they know, so, with the steel industry, the right hon. Gentlemen opposite are back at their old game, without the slightest regard for the national interest. The truth is that they do not care two hoots whether the consequence of their words is to damage the steel industry and those who work in it.

Mr. Maxwell: Let us have some argument.

Mr. Barber: I will give some. The Government are concerned only to placate
a vociferous minority of cranky extremists who shriek idiotically for more nationalisation.
If right hon. Gentlemen opposite want to know from where that comes, it is from the hon. Member for Bosworth (Mr. Wyatt).
What the Government have done, as they did on the previous occasion when we debated the nationalisation of steel,

is to make a partial selection of the facts, to lace them with specious argument and to reach a conclusion which they know is bogus.

Mr. Maxwell: This is not a constituency meeting.

Mr. Barber: If hon. Members opposite doubt my words, let me give a specific example.
This afternoon the Minister of Power went out of his way to criticise the productivity of the British steel industry, and he did so in comparison with two other countries, the United States of America and Japan. Why did not the right hon. Gentleman give the House the other facts which are in his possession? The steel-making costs in Britain are not only unbeaten by Japan, but are significantly lower than those of the United States. Why was it left to my right hon. Friend to mention that last year productivity was up by 9½ per cent? Why did not the right hon. Gentleman mention that?
The simple reason why the right hon. Gentleman ignores these facts is that he is no longer behaving as the Minister responsible for the oversight of the steel industry, but as the party political mouthpiece of Transport House.

Mr. William Hamilton: Mr. William Hamilton (Fife, West) rose—

Mr. Deputy-Speaker (Dr. Horace King): Mr. Deputy-Speaker (Dr. Horace King) Order. The hon. Member knows that he must resume his seat if the right hon. Member does not give way.

Mr. Hamilton: I think that the right hon. Gentleman was about to give way.

Mr. Barber: Yes.

Mr. Hamilton: Can the right hon. Gentleman tell the House for whom the Leader of the Opposition was speaking when he talked about the junk yard of nationalised industries?

Mr. Barber: I am talking about the steel industry. What is more, I am talking about the right hon. Gentleman who, during the debate on the Address in reply to the Gracious Speech, was knocking the steel industry, at a time when output was at an all-time record.
What is the right hon. Gentleman talking about when he gibes at the productivity of the steel industry? Is he talking


about labour productivity, or about overall productivity? If he is talking about the former, the clear implication of what he is saying is that the work force is too large. Why, then, has there been no statement about the consequences for those who work in the industry, and who will be out of a job if the right hon. Gentleman's words mean anything at all?
If the right hon. Gentleman's criticisms of the productivity of the industry refer to over-all productivity, including capital productivity, then, with respect, as an argument for nationalisation he is talking nonsense. One has only to look at the solitary remaining nationalised steel company, Richard Thomas and Baldwins, which has been referred to quite a lot this afternoon. Does anybody really believe that the overall productivity of Richard Thomas and Baldwins, taking into account the enormous Exchequer capital which has been poured into it, provides any argument for further nationalisation?
Every objective observer knows that the contrary is the case. About £150 million of public money has been put into Richard Thomas and Baldwins.

Mr. Merlyn Rees: Mr. Merlyn Rees rose—

Mr. Barber: If the right hon. Gentleman and the Chancellor of the Exchequer do not already know it, I will tell them that one of the great problems with regard to Richard Thomas and Baldwins which any Government, whether Labour or Conservative, must face is that, whatever the zeal and devotion of the management, there will never be—and we realised this when we were in Office—the same degree of financial discipline and cost-conscienceness which are inherent in private enterprise.

Mr. Merlyn Rees: Mr. Merlyn Rees rose—

Mr. Michael Foot: The right hon. Gentleman says that his experience with Richard Thomas and Baldwins showed that as a nationalised firm it could never show the efficiency of the other firms. Does he recall what he said during the debate on 23rd March, 1961? He then said:
Richard Thomas and Baldwins is an extremely efficient firm which has been doing extremely well."—[OFFICIAL REPORT, 23rd March, 1961; Vol. 637, c. 610.]

Mr. Barber: What I am saying is that if we take into account all the capital which has been provided for Richard Thomas and Baldwins—

Hon. Members: Answer the question.

Mr. Merlyn Rees: Mr. Merlyn Rees rose—

Mr. Barber: I hope that the hon. Member will be able to hold himself in check.

Mr. Deputy-Speaker: Order. The right hon. Member obviously does not wish to give way. The hon. Member must not keep repeating his attempts to intervene.

Mr. Barber: At a time of rising prices, at a time of high interest rates, and at a time of swingeing increases in taxation, it is well to remember that the extra cost of nationalising the steel industry will inevitably fall upon the people of Britain in the form either of increased prices, of increased taxation—or both. The arguments against nationalisation could hardly have been put better than they were by my right hon. Friend the Member for Guildford (Sir R. Nugent). He referred to the inevitable Ministerial control, limiting the freedom of management, and also to the absence of the profit motive, depriving the industry of the driving force of private enterprise.
My right hon. Friend referred in some detail to the achievements of the steel industry. Every time he mentioned a fact which was to the credit of the industry, and so one up for Britain, the Government benches sat silent and morose. Why did not they cheer when he told them that last year output had reached an all-time record; when he told them that exports were an all-time record, and that productivity was an all-time record? The reason for their icy silence is not far too seek. It is because they know that all the facts lead to the conclusion that whatever new arrangements may be desirable for the steel industry—whatever amendments to the 1953 Act may he called for—outright nationalisation of 90 per cent. of the industry would be an unmitigated disaster.
The Minister of Power told us that quite apart from the performance of the industry the case for the nationalisation of steel stems from the basic character of the industry. This is what he said:
In the Government's view this industry is one of the commanding heights' of the


economy which must be brought into public ownership."—[OFFICIAL REPORT, 9th November, 1964; Vol. 701, c. 685.]
If his words mean anything, and certainly if they mean what Mr. Aneurin Bevan meant when he used the "commanding heights" argument, then nationalisation of steel is to be the means of controlling industry in the private sector, and there is no other means of achieving this than by pricing policy and supply policy. The Minister of Power does not deny that this is precisely what he and the Left-wing clique in the Cabinet are set out to do. As Mr. Aneurin Bevan said,
Why gaze into the crystal when you can read the book?
Listen to the words of the Minister of Housing and Local Government because, once again, he has let the cat out of the bag. He said:
When coal, electricity and steel are nationalised we shall have the basis for controlling the motor car industry.
Is this part of the great national economic development plan which the First Secretary has been trying to formulate for the past six months? I hope that he will tell us.
This is highly relevant because, apart from the "commanding heights" argument, enabling the Government indirectly to control the private sector, there is no serious argument in favour of nationalisation as a solution of whatever may be the problems of the industry. The tragedy of the situation is that the right hon. Gentleman had every reason to know that if he had approached this matter on the basis of a genuine effort to remedy whatever may be the defects of the present arrangements under the 1953 Act he would have had the co-operation of the industry and also of hon. Members on this side of the House—and he would also have earned the respect and approval of the nation. The opportunity was there, but it was deliberately chucked away.
It is little wonder—the House may like to know this; I do not suppose that those on the Government benches know it—that of the seven Ministers who were invited to speak at the Cutlers' Feast—an occasion which, as Sheffield Members will know, is traditionally addressed by a Member of Her Majesty's Government

—not a single one dared to travel to Sheffield to face the industry.
What would be the consequences if, after tonight's vote, the Government were to go ahead with their Bill to nationalise steel? The first consequence would be, as has been pointed out by several hon. Members opposite, that an industry of paramount importance to the economy would be plunged into uncertainty. Even assuming that the Bill ever received the Royal Assent there would, as was pointed out by the right hon. Member for Vauxhall, be a further nine months which would elapse before vesting day. Even after that period on the formula laid down in the White Paper there would be a further year or even longer before any decision was reached on the new form of organisation for the industry. If the Government had deliberately set out to frustrate for the next two years—[HON. MEMBERS: "Hear hear."] I should like to welcome the right hon. Gentleman the Prime Minister to our debate. I am only sorry that he did not have an opportunity to listen to some of the speeches of his hon. Friends.

The Prime Minister (Mr. Harold Wilson): I thank the right hon. Gentleman for his welcome. I have been with the National Farmers' Union and other farmers' organisations—[HON. MEMBERS: "Hear hear."] I thought that hon. Members opposite were interested in these things—for the last four hours.

Hon. Members: Hear hear.

Mr. Deputy-Speaker (Dr. Horace King): Order. The House has been very well behaved so far. I hope that it will continue to be.

The Prime Minister: I listened to the right hon. Member for Enfield, West (Mr. Iain Macleod) this afternoon for long enough to be quite sure that the Leader of the Opposition was safe.

Mr. Barber: I would make two observations on that intervention. First, I am sorry that the right hon. Gentleman has lost his sense of humour. Secondly, I hope that the right hon. Gentleman had a better time with the farmers than his right hon. Friends have had here this afternoon.
I was saying—I agree with hon. Gentlemen opposite who raised the point—that it would take at least two years before a new form of organisation would come into being. If the Government had deliberately set out to frustrate for the next two years all initiative and enterprise and to render meaningless decisions on capacity and efficiency and rationalisation and to give the maximum encouragement to our overseas competitors, I must say that they could hardly have made a better job of it. All this is espoused by a Prime Minister who, only a few weeks ago, had the audacity to appeal to the nation on television to abandon "the attitude that what was good enough for grandfather is good enough for me".
The truth is, of course, as The Guardian observed:
The Government's policy for steel is to apply a remedy which its grandmother thought good, but diluting the medicine slightly because it did not work too well 15 years ago.
But let me go back to—

Mr. Ivor Richard: Mr. Ivor Richard (Barons Court) rose—

Hon. Members: Give way.

Mr. Barber: Let me come back—

Hon. Members: Be fair.

Mr. Barber: This is the House of Commons, not a Labour Party meeting.
Let me come back to the consequences of steel nationalisation. Whatever the ideological arguments of the hon. Gentlemen opposite, and I respect those who are sincere about them, there could surely be no one in his right senses who would pretend that nationalisation will not push up prices all round. Just when the Restrictive Practices Court has outlawed the industry's common pricing arrangements, in step the Government with a policy the effect of which would be to exclude all price competition from 90 per cent. of the industry.
And the safeguard for the consumer? It is all there, set out neatly in the White Paper—a brand new consumers' council. But if the consequences for the home consumer are serious, the effect on our exports could be disastrous. Let me remind the House that 20 per cent. of all British steel is directly exported and that a further 20 per cent. is exported

indirectly in the form of steel-containing products.
It is incredible, at a time when Britain is faced with the most serious balance of payments problems—[HON. MEMBERS: "Oh."]—that this major industry should be put in jeopardy. It is all very well for the right hon. Gentleman the Minister of Power—[Interruption.] I think that I had better make this clear. At a quarter to nine I asked how long the right hon. Gentleman the First Secretary wanted. He was not available. [Interruption.] No, the right hon. Gentleman is going to have it now. At five minutes to nine, I was told that the right hon. Gentleman wanted a little more than half an hour. I had no choice but to get up when the hon. Member for Pembroke (Mr. Donnelly) sat down and I intend to finish what I have to say.
After all, the steel industry, as, I think, everybody in the House would agree, is quite different from other basic industries which are now nationalised. Most hon. Members would agree with this, but the Minister of Power spent about five minutes talking about the gas industry, as though this will have some relevance to the steel industry. If the right hon. Gentleman's arguments are valid for nationalising this industry, the first great manufacturing industry with a diversity of products, why stop at steel? What of chemicals, for instance? I ask him whether the Government have chemicals in mind. [Laughter.] The First Secretary laughs. Is this what he has in mind? [An HON. MEMBER: "Get on with it."] Certainly, the carte blanche powers for further diversification altogether outside the iron and steel industry are a salutary warning to anyone who is so naive as to think that this is the end of the road.
Whatever may be the intrinsic merits of the nationalisation of steel, there is one conclusion which cannot be gainsaid. To choose this moment to bring the proposal forward—a time when it is vital to regain overseas confidence—is to discard all pretence that the Government are concerned for the national interest. After all, it can hardly be the case that there are no other unfulfilled pledges of the Labour Party waiting for legislation. Why is steel to be given priority? [Interruption.] The First Secretary can take up time. It is his own time. Why is steel to be given priority?
Perhaps the right hon. Gentleman will answer this serious point. Why is steel—

Mr. Deputy-Speaker: These last two minutes have not done the House much good.

Mr. Barber: Why is steel to be given priority over legislation to help the home owner? The simple reason that there is to be no help for the home owner was expressed by the Minister of Housing and Local Government in these words:
… help to intending owner-occupiers would require legislation and … there will be no time for that this Session …".—[OFFICIAL REPORT, 24th November, 1964; Vol. 702, c. 1075–6.]
So we have it—no time for the hard-pressed owner-occupier, but all the time in the world for Clause Four. Who wants nationalisation of steel? [HON. MEMBERS: "We do."] As I say, Who wants the nationalisation of steel? [HON. MEMBERS: "We do."] Perhaps the right hon. Gentleman will answer a very simple question, one which concerns him personally—[HON. MEMBERS: "Time."]—because it will only take him a moment. In this document I am holding, his election document, not a solitary reference was made to the nationalisation of steel. [HON. MEMBERS: "Time."] The truth is that the country does not want it and the majority of hon. Members do not want it, yet, despite this, the Government are going ahead. [HON. MEMBERS: "Time."] In the certain knowledge that on this issue we have the country solidly behind us, we shall fight it all the way.

9.30 p.m.

The First Secretary of State and Secretary of State for Economic Affairs (Mr. George Brown): The right hon. Member for Altrincham and Sale (Mr. Barber) and his Whips agreed with me and my Whips—[HON. MEMBERS: "Get on with it."]—long before nine o'clock in the House what the time scale should be. They have chosen to cheat [Interruption.] I remind them that two can play that game. At least I stand by my bargains.

Hon. Members: "Three per cent."

Mr. Deputy-Speaker (Dr. Horace King): Order.

Mr. Brown: I say that to all those Dr. Goebbels associates on the bench opposite. May we now, in the time the right hon. Gentleman, for his own ego, has left me in which to answer the debate, return to the subject under discussion? What are we dealing with here? [Interruption.] Every time I wind up a debate this happens. [Interruption.]

Mr. Deputy-Speaker: Order. Hon. and right hon. Gentlemen on the Government Benches listened with reasonable tolerance. [Interruption.] Order. I said, "reasonable". I appreciate that opinions about that differ. I hope that the Opposition will listen to the Government speaker with the same amount of tolerance.

Mr. Brown: The right hon. Gentleman the Leader of the Opposition buries his head in his hands and giggles just as much as does the right hon. Member for Bexley (Mr. Heath). Every time I am entitled to expect the same hearing that the Leader of the Opposition is so used to claiming for himself it happens. I do not get the same hearing, but then, being a laird, I suppose that he never thinks that the other chap is similarly entitled. [Interruption.] Will hon. Gentlemen opposite just listen? I want the public outside to know how the Opposition behave every time we wind up a debate.

Mr. Barber: Four minutes.

Mr. Brown: It is well worth losing four minutes in order that the public should know what goes on here. They should know that it does not come from the back benches opposite but that it is led by the Leader of the Opposition on the Front Bench.
We are dealing with an industry of tremendous importance to the nation. It is fundamental, basic and it enters into everybody's considerations. We are not really debating it unless we discuss its present state. We can come later to the differences of view between us as to what we should do with it.
Nobody has stated better the condition of the industry at present than The Times which, in an article on 1st May, in which it opposed the White Paper, set out the problems of this enormous and fundamental industry. It stated that the industry is not efficient enough; it is overmanned; its expansion plans have not been positive


enough; it has depended on Government money; it has not formed the larger units that are necessary, and it has clung to common pricing until this was outlawed. That was stated by an independent quarter opposing what we propose to do about it. It was as formidable an indictment of a basic industry as one could get. The thing that has been missing from the speeches of hon. Gentlemen opposite is a recognition that what we need in this industry is a fundamental reconstruction and re-alignment. We need larger sized units.
We need larger-sized corporations. We cannot go back—there is no possibility of going back—to real competition. The questions the right hon. Gentleman the Member for Enfield, West (Mr. Iain Macleod) asked at the beginning were the wrong questions. Incidentally, he was jolly badly advised on his figures. The Richard Thomas and Baldwins loan payments and the Colvilles loan payments were totally wrong. R.T.B., a nationalised firm has paid back; Colvilles, the private-enterprise firm, has not.
The issues were not the real ones. I submit that there is no question about what we have to do. The issue between us is how we do it. We say—and, of course, we can be wrong about this—that the right way is to own the equity of the companies, and thereby be able to get the management right. Others say that something different is the right way. However, let us start by agreeing—as nobody today on that side of the Chamber has done—what it is we have to do.
What are the clear weaknesses in the industry? First of all, there is size. Whether we are talking about units of production or whether we are talking about the boards which can control them, sizes in this country match nobody else's. They do not give us a chance to integrate, either vertically or horizontally. Secondly, there is performance. The industry simply does not stand up. Again, we can talk about exports—and here the right hon. Member for Altrincham and Sale was less than his usual self, I thought. If I may say so, he looked as though he was not at all well, and I give him my sympathy on that—

Mr. Barber: Mr. Barber rose—

Mr. Brown: No. If the right hon. Gentleman leaves no time, of course, one cannot give way.
When the right hon. Gentleman was talking about R.T.B. and its exports, someone asked him, "R.T.B. exports 40 per cent. of its production, does it not?" The right hon. Gentleman replied, "Yes, but it loses money, too." May I say that in my job, not as a politician—[HON. MEMBERS: "What as?"] Just in my job, and it could be anyone over there holding the job—if the argument is that one does not export in the nation's interest but only when one makes money, one is doing a very unpatriotic thing.
R.T.B. has exported when the export prices were lower than the prices at home, and the right hon. Gentleman knew as well as I knew that the market at home was being parcelled out, so R.T.B., and R.T.B. alone to this extent, went into the export market. But its performance, and the performance of the industry as a whole does not stand up—

Mr. Barber: Mr. Barber rose—

Mr. Brown: No. The right hon. Gentleman took his time, and has had his time. He told me that he would decide how long he took—O.K., he took it, and that is that. I take the rest of the time. I take the time he left me. That is all I get. I get the thin end of the stick, but the right hon. Gentleman decided.
On pricing policies, right hon. Gentlemen opposite know that the industry has been doing the wrong things. The right hon. Member for Enfield, West, who opened the debate in such a different spirit from that of the right hon. Member for Altrincham and Sale, said that once the firms were told that their pricing policies were wrong, they dropped them. But the point is that they had to be told—and then, in some extraordinary way, the same prices go on being charged.
Frankly, this is not a basis on which one can leave the industry as it is today. The question now, the only question—and the only question that has not been discussed from the other side—is what


we are to do about it—we, the nation—because it quite clearly cannot be left where it is—

Mr. Duncan Sandys: We, the nation?

Mr. Brown: Yes, and that includes the right hon. Gentleman and me. What is the matter with the right hon. Gentleman? We, the nation—who are we in this House unless it is we, the nation—all the nation?

Mr. Sandys: The right hon. Gentleman talks about "we, the nation". Does he really think that this policy has the backing of the nation?

Mr. Brown: The right hon. Gentleman is getting so clever in his old age. I mean us, all of us, and I included the right hon. Gentleman—

Mr. Sandys: Thank you.

Mr. Brown: Do not be silly. I was, in fact, speaking for the nation. I was not speaking like a silly, ageing politician—

Mr. Deputy-Speaker: Order. We have had a fierce political debate; let us keep it political and not personal.

Mr. Brown: There are times when the right hon. Gentleman would do well to remember that in this House we speak for the nation—[HON. MEMBERS: "Oh."]—and not for the Tory Party. We speak for the nation. I included the right hon. Gentleman, but I clearly did him more justice than was his due.
A possible solution is greater competition, but does anyone in the House think that we could give greater competition to this industry—[HON. MEMBERS: "Why not?"]—I will tell Members why not. It is because the industry itself says not. It had competition in the early 'twenties—it nearly destroyed itself on that basis. It has been trying ever since to protect itself against competition. Given an industry of this kind, greater competition is not the answer.
There is another alternative. That is greater powers, as suggested by my right hon. Friend the Member for Vauxhall (Mr. Strauss), for a control board. I will return to this later. It has always seemed to me that, if it is attempted to impose State control on people who have to earn their living by reference to the profit

motive, one is bound to get the worst of all worlds. I do not think that runs, any more than the idea of greater free competition runs. The other alternative is more State intervention in a partial way, either in some companies or in the industry as a whole.
Before I examine all this, may I establish why we think that public ownership in one form or the other is inevitable. First, it relates to size—to the size of the industry and to the size that the units must reach. This is an enormously large industry. It is of such a size that its impact on the economy, its impact on our social structure, is bound to be tremendous. It will dispose of power which in my view cannot be left to individuals. Secondly, it is of such a basic nature that it enters into everything that everybody else does—every kind of work. In my view, when a thing gets to that size it cannot be left to private individuals.
Thirdly, it can no longer raise its own money. It needs, it has needed, and it will need, public money to do the job. The fourth factor is the total inevitability of future mergers, and therefore the greater concentration of power. Whatever anybody says, the industry needs to merge. It needs to form fewer units. It needs to concentrate power more closely. Once that happens, it is getting to be a State within a State. That sort of power cannot be left to individuals.
A long time ago a man who is not much revered by the party opposite, Lord Beveridge, said that, when an industry gets itself into the situation where it becomes a monopoly and has become a monopoly, it would be far better to be a public monopoly than to be a private monopoly. I commend that to the Liberal Party.
Therefore, on principle we are bound to face the fact that the industry has moved towards, is moving towards, and is now in, a situation where private ownership in some form is inevitable—[HON. MEMBERS: "Hear, hear."]—I am sorry; I should have said "public ownership"—public ownership and public control of some form is inevitable.
I have given, or tried to give, the grounds of principle. Let me give the grounds of practice. How else shall we bring about the reorganisation that is required? How else will groups of people.
units, be persuaded to concentrate themselves? How else will what is being done be rationalised, unless somebody from outside is bringing this about? How else can one get them to go for export performance? How else will one get them to go for import substitution by raising their quality standards?
I would say to hon. and right hon. Members opposite, who find it so hard to sit through half-an-hour at the end of the day, that I meet steel users. Every time I go to the right hon. Gentleman's country I meet them. Let hon. Members opposite ask them what they think about the performance of the steel-producing industry's steel masters. Conservative supporters, unlike the tame Conservatives in this House, know that something has to be done about the industry in its present situation. We say rightly or wrongly—[HON. MEMBERS: "Wrongly."] It may be so, but we say rightly or wrongly that the right way to deal with this matter is to acquire the capital.
What is the case against us? First, that our proposal is not relevant. I submit to the House that that is certainly not a basis on which our proposal can be shot down. It is clearly relevant. It is the way in which we can get the job done and the way the nation thinks it ought to be done. [HON. MEMBERS: "Oh."] The nation is the Government acting through Parliament. The nation is the same when we are in power as it is when the Tories are in power. This is the way in which to get an industry like this operating within a national plan. It is the only way in which we shall have the manning changes which are essential, and tremendous manning changes are needed. We shall not get them made unless the men and their organisations feel that there is a bigger purpose behind this than somebody's private profit.
The next point is whether the size will be too big. If we nationalise and if we take the equity, will we produce an industry that is too big? We shall not change the size of the industry. It will be as big as it is already. [Laughter.] Of course. The Leader of the Opposition who is listening must be very proud of his friends. The only issue is the question of over what area one can control policy. That is the only issue that we are arguing about.
Another part of the case made against nationalisation is whether it will be bureaucratic. I ask hon. and right hon. Members opposite to look at the present situation and the number of bodies who try to check and recheck each other, control and counter-control each other. [HON. MEMBERS: "Look behind."] Nationalisation should not produce anything as bureaucratic as that.
Another argument made against us is on exports—that people will not buy from us. I was staggered to hear the right hon. Gentleman argue today that people will not buy from us if the organisation from which they are buying is known to be nationalised. Our private steel masters have been buying from Voest and all sorts of nationalised enterprises. Many Americans buy from Renault and have been buying from Volkswagen. People do not ask themselves that. They ask themselves whether what they are being asked to buy is efficient and is worth the money they are being asked to pay for it.

Mr. Iain Macleod: This is, as I put it to the right hon. Gentleman, a question of fact. I said that, if he asked the steel companies in this country, he would collect evidence that for some time, since this threat came, the companies with which they are dealing abroad have been putting saving clauses in. Will he take that up and get the information?

Mr. Brown: I shall certainly take it up, but it is not, in fact, our information.
In the five minutes which the right hon. Gentleman left to me, I now turn to an issue which earlier much moved that part of the House which was here, the issue of those who are not against us but who think that there are alternatives. I have already referred to my right hon. Friend the Member for Vauxhall. Frankly, I do not think that the alternative of a strengthened control board directing other people what to do with their money and their interests can be a runner.
I come now to my hon. Friend the Member for Bosworth (Mr. Wyatt). I listened to him with great care. I have heard him many times before. He and I are great personal friends. But on this issue, although not on others on which we have been jointly engaged in the past, I think that he is living in an Alice-in-Wonderland world. May I try to establish what the situation is? He wants, as


I understand it, to control the research, the production, the development and the manning policies of the industry. So do I. He wants also to control its relation to the national plan. So do I. He thinks that we should do it by taking a 51 per cent. holding in 13 selected companies—and presumably, also, selling the 49 per cent. in the 14th.
My hon. Friend made it absolutely plain, in specific words, that he was out for public control, and to that extent he and I are wholly agreed. The benches opposite cheered him, without, I think, understanding the basic agreement between my hon. Friend and myself. The disagreement between him and me, if there is one, is on whether, in order to get the requisite degree of public control, it is necessary or desirable to own all the shares or to own a specified number of them. I know from my talks with my hon. Friend that he does not tie himself to 51 per cent. He argues on whether one needs a bare majority, the lot or something in between.
I wish to make it quite clear to the House that, in my view, against the background of the way the owners of the industry have behaved up to now, nothing short of 100 per cent. will do. I wish to make clear, also, that I am not persuaded that it could be fair if one took something less than 100 per cent. because some shareholders would then feel them-

selves cheated. These are reasons which, in practice, have led us to the view that 100 per cent. shareholding is inescapable and essential, not old-fashioned as my hon. Friend suggests, although he says that he believes that the control of the industry in the national interest could be got by something less than 100 per cent.

The White Paper which we commend to the House is settled on the basis of what we frankly believe to be the realities of the situation.

I am prepared to say that, if the industry and its friends the Tory Party will come to us and say that they are prepared for the Government to assume the control which we and my hon. Friend agree is essential, we shall, of course, listen to what they have to say.

Mr. Wyatt: Do I understand my right hon. Friend to say that, if the industry will come forward and concede the complete control which we both agree is necessary on something less than 100 per cent., he is prepared to listen? If so, I shall vote for his White Paper.

Mr. Brown: "Listen" is the word. Listen, certainly.

Question put:—

The House divided: Ayes 310, Noes 306.

Division No. 103.]
AYES
[10.0 p.m.


Abse, Leo
Brown, R. W. (Shoreditch &amp; Fbury)
Diamond, John


Albu, Austen
Buchan, Norman (Renfrewshire, W.)
Dodds, Norman


Allaun, Frank (Salford, E.)
Buchanan, Richard
Doig, Peter


Aldritt, Walter
Butler, Herbert (Hackney, C.)
Donnelly, Desmond


Allen, Scholefield (Crewe)
Butler, Mrs. Joyce (Wood Green)
Driberg, Tom


Armstrong, Ernest
Callaghan, Rt. Hn. James
Duffy, Dr. A. E. P.


Atkinson, Norman
Carmichael, Neil
Dunn, James A.


Bacon, Miss Alice
Carter-Jones, Lewis
Dunnett, Jack


Barnett, Joel
Castle, Rt. Hn. Barbara
Edelman, Maurice


Baxter, William
Chapman, Donald
Edwards, Rt. Hn. Ness (Caerphilly)


Beaney, Alan
Coleman, Donald
Edwards, Robert (Bilston)


Bellenger, Rt. Hn. F. J.
Conlon, Bernard
English, Michael


Bence, Cyril
Corbet, Mrs. Freda
Ennals, David


Benn, Rt. Hn. Anthony Wedgwood
Cousins, Rt. Hn. Frank
Ensor, David


Bennett, J. (Glasgow, Bridgeton)
Craddock, George (Bradford, S.)
Evans, Albert (Islington, S.W.)


Binns, John
Crawshaw, Richard
Evans, Ioan (Birmingham, Yardley)


Bishop, E. S.
Cronin, John
Fernyhough, E.


Blackburn, F.
Crosland, Anthony
Finch, Harold (Bedwellty)


Blenkinsop, Arthur
Crossman, Rt. Hn. R. H. S.
Fitch, Alan (Wigan)


Boardman, H.
Cullen, Mrs. Alice
Fletcher, Sir Eric (Islington, E.)


Boston, T. G.
Dalyell, Tam
Fletcher, Ted (Darlington)


Bottomley, Rt. Hn. Arthur
Darling, George
Fletcher, Raymond (Ilkeston)


Bowden, Rt. Hn. H. W. (Leics S.W.)
Davies, G. Elfed (Rhondda, E.)
Floud, Bernard


Boyden, James
Davies, Harold (Leek)
Foley, Maurice


Braddock, Mrs. E. M.
Davies, Ifor (Gower)
Foot, Sir Dingle (Ipswich)


Bradley, Tom
Davies, S. O. (Merthyr)
Foot, Michael (Ebbw Vale)


Bray, Dr. Jeremy
de Freitas, Sir Geoffrey
Ford, Ben


Broughton, Dr. A. D. D.
Delargy, Hugh
Fraser, Rt. Hn. Tom (Hamilton)


Brown, Rt. Hn. George (Belper)
Dell, Edmund
Freeson, Reginald


Brown, Hugh D. (Glasgow, Provan)
Dempsey, James
Galpern, Sir Myer




Garrett, W. E.
McCann, J.
Robinson, Rt. Hn. K. (St. Pancras, N.)


Carrow, A.
MacColl, James
Rodgers, William (Stockton)


George, Lady Megan Lloyd
MacDermot, Niall
Rogers, George (Kensington, N.)


Ginsburg, David
McGuire, Michael
Rose, Paul B.


Gourlay, Harry
McInnes, James
Ross, Rt. Hn. William


Greenwood, Rt. Hn. Anthony
McKay, Mrs. Margaret
Rowland, Christopher


Gregory, Arnold
Mackenzie, Gregor (Rutherglen)
Sheldon, Robert


Grey, Charles
Mackie, John (Enfield, E.)
Shinwell, Rt. Hn. E.


Griffiths, David (Rother Valley)
McLeavy, Frank
Shore, Peter (Stepney)


Griffiths, Rt. Hn. James (Llanelly)
MacMilian, Malcolm
Short, Mrs. Reneé (W'hampton, N.E.)


Griffiths, Will (M'chester, Exchange)
MacPherson, Malcolm
Silkin, John (Deptford)


Gunter, Rt. Hn. R. J.
Mahon, Peter (Preston, S.)
Silkin, S. C. (Camberwell, Dulwich)


Hale, Leslie
Mahon, Simon (Bootle)
Silverman, Julius (Aston)


Hamilton, James (Bothwell)
Mallalieu, E. L. (Brigg)
Silverman, Sydney (Nelson)


Hamilton, William (West Fife)
Mallalieu, J.P.W.(Huddersfield, E.)
Skeffington, Arthur


Hamling, William (Woolwich, W.)
Manuel, Archie
Slater, Mrs. Harriet (Stoke, N.)


Hannan, William
Mapp, Charles
Slater, Joseph (Sedgefield)


Harper, Joseph
Marsh, Richard
Small, William


Harrison, Walter (Wakefield)
Mason, Roy
Smith, Ellis (Stoke, S.)


Hart, Mrs. Judith
Maxwell, Robert
Snow, Julian


Hattersley, Roy
Mayhew, Christopher
Solomons, Henry


Hazell, Bert
Mellish, Robert
Soskice, Rt. Hn. Sir Frank


Healey, Rt. Hn. Denis
Mendelson, J. J.
Spriggs, Leslie


Heffer, Eric S.
Mikardo, Ian
Steele, Thomas (Dunbartonshire, W.)


Henderson, Rt. Hn. Arthur
Millan, Bruce
Stewart, Rt. Hn. Michael


Herbison, Rt. Hn. Margaret
Miller, D. M. S.
Stonehouse, John


Hill, J. (Midlothian)
Milne, Edward (Blyth)
Stones, William


Hobden, Dennis (Brighton, K'town)
Molloy, William
Strauss, Rt. Hn. C. R. (Vauxhall)


Holman, Percy
Monslow, Walter
Stross, SirBarnett(Stoke-on-Trent, C.)


Horner, John
Morris, Charles (Openshaw)
Summerskill, Dr. Shirley


Houghton, Rt. Hn. Douglas
Morris, John (Aberavon)
Swain, Thomas


Howarth, Harry (Wellingborough)
Mulley, Rt.Hn. Frederick(Shefield Pk)
Swingler, Stephen


Howarth, Robert L. (Bolton, E.)
Murray, Albert
Symonds, J. B.


Howell, Denis (Small Heath)
Neal, Harold
Taverne, Dick


Howie, W.
Newens, Stan
Taylor, Bernard (Mansfield)


Hoy, James
Noel-Baker, Francis (Swindon)
Thomas, George (Cardiff, W.)


Hughes, Cledwyn (Anglesey)
Noel-Baker, Rt.Hn.Philip(Derby,S.)
Thomas, lorwerth (Rhondda, W.)


Hughes, Emrys (S. Ayrshire)
Norwood, Christopher
Thomson, George (Dundee, E.)


Hughes, Hector (Aberdeen, N.)
Oakes, Gordon
Thornton, Ernest


Hunter, Adam (Dunfermline)
Ogden, Eric
Tinn, James


Hunter, A. E. (Feltham)
O'Malley, Brian
Tomney, Frank


Hynd, H. (Accrington)
Oram, Albert E. (E. Ham, S.)
Tuck, Raphael


Hynd, John (Attercliffe)
Orbach, Maurice
Urwin, T. W.


Irvine, A. J. (Edge Hill)
Orme, Stanley
Varley, Eric G.


Jackson, Colin
Oswald, Thomas
Wainwright, Edwin


Janner, Sir Barnett
Owen, Will
Walden, Brian (All Saints)


Jay, Rt. Hn. Douglas
Padley, Walter
Walker, Harold (Doncaster)


Jeger, George (Goole)
Page, Derek (King's Lynn)
Wallace, George


Jeger, Mrs.Lena (H'b'n&amp;St.P'cras,S.)
Paget, R. T.
Warbey, William


Jenkins, Hugh (Putney)
Palmer, Arthur
Watkins, Tudor


Jenkins, Rt. Hn. Roy (Stechford)
Pannell, Rt. Hn. Charles
Weitzman, David


Johnson, Carol (Lewisham, S.)
Pargiter, G. A.
Wells, William (Walsall, N.)


Johnson, James(K'ston-on-Hull, W.)
Park, Trevor (Derbyshire, S.E.)
White, Mrs. Eirene


Jones, Dan (Burnley)
Parker, John
Whitlock, William


Jones,Rt.Hn.SirElwyn (W. Ham, S.)
Parkin, B. T.
Wigg, Rt. Hn. George


Jones, J. Idwal (Wrexham)
Pavitt, Laurence
Wilkins, W. A.


Jones, T. W. (Merioneth)
Pearson, Arthur (Pontypridd)
Willey, Rt. Hn. Frederick


Kelley, Richard
Peart, Rt. Hn. Fred
Williams, Alan (Swansea, W.)


Kenyon, Clifford
Pentland, Norman
Williams, Albert (Abertillery)


Kerr, Mrs. Anne (R'ter &amp; Chatham)
Perry, Ernest G.
Williams, Mrs. Shirley (Hitchin)


Kerr, Dr. David (W'worth, Central)
Popplewell, Ernest
Williams, W. T. (Warrington)


Lawson, George
Prentice, R. E.
Willis, George (Edinburgh, E.)


Leadbitter, Ted
Price, J. T. (Westhoughton)
Wilson, Rt. Hn. Harold (Huyton)


Ledger, Ron
Probert, Arthur
Wilson, William (Coventry, S.)


Lee, Rt. Hn. Frederick (Newton)
Pursey, Cmdr. Harry
Winter-bottom, R. E.


Lee, Miss Jennie (Cannock)
Randall, Harry
Woodburn, Rt. Hn. A.


Lever, Harold (Cheetham)
Rankin, John
Woof, Robert


Lever, L. M. (Ardwick)
Redhead, Edward
Wyatt, Woodrow


Lewis, Arthur (West Ham, N.)
Rees, Merlyn
Yates, Victor (Ladywood)


Lewis, Ron (Carlisle)
Reynolds, G. W.
Zilliacus, K.


Lipton, Marcus
Rhodes, Geoffrey



Lomas, Kenneth
Richard, Ivor
TELLERS FOR THE AYES:


Loughlin, Charles
Roberts, Albert (Normanton)
Mr. Edward Short and


Mabon, Dr. J. Dickson
Roberts, Goronwy (Caernarvon)
Mr. Sydney Irving.


McBride, Neil
Robertson, John (Paisley)





NOES


Agnew, Commander Sir Peter
Anstruther-Gray, Rt. Hn. Sir W.
Balniel, Lord


Alison, Michael (Barkston Ash)
Astor, John
Barber, Rt. Hn. Anthony


Allan, Robert (Paddington S.)
Atkins, Humphrey
Barlow, Sir John


Allason, James (Hemel Hempstead)
Awdry, Daniel
Batsford, Brian


Amery, Rt. Hn. Julian
Baker, W. H. K.
Beamish, Col. Sir Tufton







Bell, Ronald
Gilmour, Ian (Norfolk, Central)
Mackle, George Y. (C'ness &amp; S'land)


Bennett, Sir Frederick (Torquay)
Gilmour, Sir John (East Fife)
Maclean, Sir Fitzroy


Bennett, Dr. Reginald (Gos &amp; Fhm)
Glover, Sir Douglas
Macleod, Rt. Hn. Iain


Berkeley, Humphry
Glyn, Sir Richard
McMaster, Stanley


Berry, Hn. Anthony
Godber, Rt. Hn. J. B.
McNair-Wilson, Patrick


Bessell, Peter
Goodhart, Philip
Maginnis, John E.


Biggs-Davison, John
Goodhew, Victor
Maitland, Sir John


Bingham, R. M.
Gower, Raymond
Marlowe, Anthony


Birch, Rt. Hn. Nigel
Grant, Anthony
Marples, Rt. Hn. Ernest


Black, Sir Cyril
Grant-Ferris, R.
Marten, Neil


Blaker, Peter
Gresham-Cooke, R.
Mathew, Robert


Bossom, Hn. Clive
Grieve, Percy
Maude, Angus


Bowen, Roderic (Cardigan)
Griffiths, Eldon (Bury St. Edmunds)
Maudling, Rt. Hn. Reginald


Box, Donald
Griffiths, Peter (Smethwick)
Mawby, Ray


Boyd-Carpenter, Rt. Hn. J.
Grimond, Rt. Hn. J.
Maxwell-Hyslop, R. J.


Boyle, Rt. Hn. Sir Edward
Gurden, Harold
Maydon, Lt.-Cmdr. S. L. C.


Braine, Bernard
Hall, John (Wycombe)
Meyer, Sir Anthony


Brewis, John
Hall-Davis, A. G. F.
Mills, Peter (Torrington)


Brinton, Sir Tatton
Hamilton, Marquess of (Fermanagh)
Mills, Stratton (Belfast, N.)


Bromley-Davonport,Lt.-Col.Sir Walter
Hamilton, M. (Salisbury)
Miscampbell, Norman


Brooke, Rt. Hn. Henry
Harris, Frederic (Croydon, N.W.)
Mitchell, David


Brown, Sir Edward (Bath)
Harris, Reader (Heston)
Monro, Hector


Bruce-Gardyne, J.
Harrison, Brian (Maldon)
More, Jasper


Bryan, Paul
Harrison, Col. Sir Harwood (Eye)
Morgan, W. G.


Buchanan-Smith, Alick
Harvey, Sir Arthur Vere (Maccles'd)
Morrison, Charles (Devizes)


Buck, Antony
Harvey, John (Walthamstow, E.)
Mott-Radclyffe, Sir Charles


Bullus, Sir Eric
Harvie Anderson, Miss
Munro-Lucas-Tooth, Sir Hugh


Burden, F. A.
Hastings, Stephen
Murton, Oscar


Butcher, Sir Herbert
Hawkins, Paul
Neave, Airey


Buxton, R. C.
Hay, John
Nicholls, Sir Harmar


Campbell, Gordon
Heald, Rt. Hn. sir Lionel
Nicholson, Sir Godfrey


Carlisle, Mark
Heath, Rt. Hn. Edward
Noble, Rt. Hn. Michael


Carr, Rt. Hn. Robert
Hendry, Forbes
Nugent, Rt. Hn. Sir Richard


Cary, Sir Robert
Higgins, Terence L.
Onslow, Cranley


Channon, H. P. G.
Hiley, Joseph
Orr, Capt. L. P. S.


Chichester-Clark, R.
Hill, J. E. B. (S. Norfolk)
Orr-Ewing, Sir Ian


Clark, Henry (Antrim, N.)
Hirst, Geoffrey
Osborn, John (Hallam)


Clark, William (Nottingham, S.)
Hobson, Rt. Hn. Sir John
Osborne, Sir Cyril (Louth)


Clarke, Brig. Terence (Portsmth, W.)
Hogg, Rt. Hn. Quintin
Page, John (Harrow, W.)


Cole, Norman
Hooson, H. E.
Page, R. Graham (Crosby)


Cooke, Robert
Hopkins, Alan
Pearson, Sir Frank (Clitheroe)


Cooper, A. E.
Hordern, Peter
Peel, John


Cooper-Key, Sir Neill
Hornby, Richard
Percival, Ian


Cordle, John
Hornsby-Smith, Rt. Hn. Dame P.
Peyton, John


Corfield, F. V.
Howard, Hn. G. R. (St. Ives)
Pickthorn, Rt. Hn. Sir Kenneth


Costain, A. P.
Howe, Geoffrey (Bebington)
Pike, Miss Mervyn


Courtney, Cdr. Anthony
Hunt, John (Bromley)
Pitt, Dame Edith


Craddock, Sir Beresford (Spelthorne)
Hutchison, Michael Clark
Pounder, Rafton


Crawley, Aidan
Iremonger, T. L.
Powell, Rt. Hn. J. Enoch


Crosthwaite-Eyre, Col. Sir Oliver
Irvine, Bryant Godman (Rye)
Price, David (Eastleigh)


Crowder, F. P.
Jenkin, Patrick (woodford)
Prior, J. M. L.


Cunningham, Sir Knox
Jennings, J. C.
Pym, Francis


Curran, Charles
Johnson Smith, G. (East Grinstead)
Quennell, Miss J. M.


Currie, G. B. H.
Johnston, Russell (Inverness)
Ramsden, Rt. Hn. James


Dalkeith, Earl of
Jones, Arthur (Northants, S.)
Rawlinson, Rt. Hn. Sir Peter


Dance, James
Jopling, Michael
Redmayne, Rt. Hn. Sir Martin


Davies, Dr. Wyndham (Perry Barr)
Joseph, Rt. Hn. Sir Keith
Rees-Davies, W. R.


d'Avigdor-Goldsmid, Sir Henry
Kaberry, Sir Donald
Renton, Rt. Hn. Sir David


Dean, Paul
Kerby, Capt. Henry
Ridley, Hn. Nicholas


Deedes, Rt. Hn. W. F.
Kerr, Sir Hamilton (Cambridge)
Ridsdale, Julian


Digby, Simon Wingfield
Kershaw, Anthony
Roberts, Sir Peter (Heeley)


Dodds-Parker, Douglas
Kilfedder, James A.
Robson Brown, Sir William


Doughty, Charles
Kimball, Marcus
Rodgers, Sir John (Sevenoaks)


Douglas-Home, Rt. Hn. Sir Alec
King, Evelyn (Dorset, S.)
Roots, William


Drayson, G. B.
Kirk, Peter
Royle, Anthony


du Cann, Rt. Hn. Edward
Kitson, Timothy
Russell, Sir Ronald


Eden, Sir John
Lagden, Godfrey
St. John-Stevas, Norman


Elliot, Capt. Walter (Carshalton)
Lambton, Viscount
Sandys, Rt. Hn. D.


Elliott, R. W.(N'c'tle-upon-Tyne,N.)
Lancaster, Col. C. C.
Scott-Hopkins, James


Emery, Peter
Langford-Holt, Sir John
Sharples, Richard


Errington, Sir Eric
Legge-Bourke, Sir Harry
Shepherd, William


Farr, John
Lewis, Kenneth (Rutland)
Sinclair, Sir George


Fell, Anthony
Litchfield, Capt. John
Smith, Dudley (Br'ntf'd &amp; Chiswick)


Fisher, Nigel
Lloyd, Rt.Hn.Geoffrey (Sut'nC'dfield)
Smyth, Rt. Hn. Brig. Sir John


Fletcher-Cooke, Charles (Darwen)
Lloyd, Ian (P'tsm'th, Langstone)
Soames, Rt. Hn. Christopher


Fletcher-Cooke, Sir John (S'pton)
Lloyd, Rt. Hn. Selwyn (Wirral)
Spearman, Sir Alexander


Foster, Sir John
Longbottom, Charles
Speir, Sir Rupert


Fraser, Rt.Hn.Hugh(St'fford &amp; Stone)
Longden, Gilbert
Stainton, Keith


Fraser, Ian (Plymouth, Sutton)
Loveys, Walter H.
Stanley, Hn. Richard


Galbraith, Hi. T. G. D.
Lubbock, Eric
Steel, David (Roxburgh)


Gammans, Lady
Lucas, Sir Jocelyn
Stodart, Anthony


Gardner, Edward
McAdden, Sir Stephen
Stoddart-Scott, Col. Sir Malcolm


Gibson-Watt, David
MacArthur, Ian
Studholme, Sir Henry


Giles, Rear-Admiral Morgan
Mackenzie, Alasdair (Ross&amp;Crom'ty)
Summers, Sir Spencer







Talbot, John E.
Turton, Rt. Hn. R. H.
Williams, Sir Rolf Dudley (Exeter)


Taylor, Sir Charles (Eastbourne)
Tweedsmuir, Lady
Wills, Sir Gerald (Bridgwater)


Taylor, Edward M. (G'gow,Cathcart)
van Straubenzee, W. R.
Wilson, Geoffrey (Truro)


Taylor, Frank (Moss Side)
Vaughan-Morgan, Rt. Hn. Sir John
Wise, A. R.


Teeling, Sir William
Vickers, Dame Joan
Wolrige-Gordon, Patrick


Temple, John M.
Walder, David (High Peak)
Wood, Rt. Hn. Richard


Thatcher, Mrs. Margaret
Walker, Peter (Worcester)
Woodhouse, Hon. Christopher


Thomas, Sir Leslie (Canterbury)
Walker-Smith, Rt. Hn. Sir Derek
Woodnutt, Mark


Thomas, Rt. Hn. Peter (Conway)
Wall, Patrick
Wylie, N. R.


Thompson, Sir Richard (Croydon,S.)
Walters, Dennis
Yates, William (The Wrekin)


Thorneycroft, Rt. Hn. Peter
Ward, Dame Irene
Younger, Hn. George


Thorpe, Jeremy
Weatherill, Bernard



Tiley, Arthur (Bradford, W.)
Webster, David
TELLERS FOR THE NOES:


Tilney, John (Wavertree)
Wells, John (Maidstone)
Mr. Whitelaw and Mr. McLaren.

Resolved, That this House approves the proposals contained in the Statement on Steel Nationalisation (Command Paper No. 2651) as a basis for legislation.

AGRICULTURE

Ploughing Grants

Ploughing Grants Scheme 1965 [draft laid before the House, 8th April], approved.—[Mr. John Mackie.]

10.15 p.m.

The Joint Parliamentary Secretary to Ministry of Agriculture, Fisheries and Food (Mr. James H. Hoy): I beg to move,
That the Ploughing Grants (Scotland) Scheme, 1965, a draft of which was laid before this House on 8th April, be approved.

Mr. Hoy: It might be—[Interruption.]

Mr. Speaker: Order. The House must now get on with its ploughing.

Mr. Hoy: It might be for the general convenience if we were to have a single discussion on the next Motion and the nine Prayers.

Mr. Speaker: Some misunderstanding arises. I called the Secretary of State and the hon. Member, as his deputy, in respect of the Ploughing Grants (Scotland) Scheme. It is quite understandable that no one should have heard me accurately. My ploughing was interrupted by the noise.

Question put and agreed to.

Resolved,
That the Ploughing Grants (Scotland) Scheme 1965, a draft of which was laid before this House on 8th April, be approved.

Winter Keep Scheme

10.16 p.m.

Mr. Hoy: I beg to move,
That the Winter Keep (England and Wales and Northern Ireland) Revocation Scheme, 1965, a draft of which was laid before this House on 27th April, be approved.
Perhaps I might say now that it might make for general convenience if we were to have a single discussion on this Motion and the nine Prayers which are on the Order Paper in the names of right hon. and hon. Members opposite.

Mr. Speaker: As this is entirely convenient I do not resist it, but it must be understood, on behalf of the Chair, that no precedent is created for no more sinis-

ter reason than that it could be used, if someone were to be so disposed, to get round the rule about Prayers.

Sir Martin Redmayne: On a point of order. I take it that in the circumstances the rule about Prayers does not apply tonight. We fully understand the position. This debate could continue after half-past eleven.

Mr. Speaker: No. I do not wish there to be any misunderstanding at all. If we combine the affirmative Motion in connection with the Prayers my difficulty is that the rule applies to the Prayers and if the discussion covers both it may well be that in the course of the discussion on the affirmative Motion matters directly related to the Prayers might arise and be discussed. But the rule about Prayers would remain constant. The fact that I am prepared to allow discussion to extend over both still leaves the rule about Prayers stopping at 11.30, subject to certain discretions. I hope that this is understood.

Mr. Hoy: I am grateful, Sir. Let me make it perfectly clear that this has been done by arrangement.
I am very grateful that it has been possible to deal in one go with the Motion on the Winter Keep Revocation Scheme and the Prayers against the nine Hill Cattle and Hill Sheep Orders. All these Orders hang very closely together. They are the result of the study of the present pattern of hill subsidies which I was commissioned to make by my right hon. Friend last autumn. The study of the long term problem is continuing, but we decided that there were some changes in the hill subsidies which should be made straight away. These we propose to put into effect with these Orders.
One of the changes we decided upon was to alter the basis of assistance for winter keep. This was announced by my right hon. Friend on 22nd December last, in a Written Answer to a Question by the hon. Member for Bury and Radcliffe (Mr. Ensor). The Winter Keep Revocation Order is part of the legislative action which we must take to carry out this change.
The Winter Keep Scheme was introduced two years ago by my predecessor


the hon. Member for Cornwall, North (Mr. Scott-Hopkins). In the debate he explained that the scheme had been designed to encourage the livestock rearer in hill areas towards greater self-sufficiency in his winter feeding arrangements. For this reason, the grants payable under the scheme were related to the acreage of specified winter feed crops which were grown on the farm.
There were some rather complicated provisions about the eligibility of hill farmers. Their land had to consist predominantly of livestock rearing land and their income had to be predominantly derived from livestock rearing enterprises; and certain crops, including barley, were excluded from the scheme. All these conditions gave rise to discussion in this House at the time the scheme was debated.
It was, I think, largely because of these rather complicated provisions that no one was really sure how the scheme would work out and whether it would give assistance to the farmers who really needed it. In fact, after a full year's operation of the scheme we found that it was not working out as fairly as I think everyone would desire in England, Wales and Northern Ireland. Experience showed that the real reason for this was that the grant was based on the acreage of cropping land. This meant that the farmer lower down the hill—in general, the one with the largest acreage of in-bye land—received the largest grant, while the man at the top of the hill, whose need for help was greatest, received little or nothing in the way of assistance.
There were others who found themselves ineligible because, although they were hill farmers, the greater part of their income came from milk or because their farm was not predominantly live-stock rearing land. In all, about 10,000 of the 29,000 farmers who are paid subsidy for hill sheep or hill cows found that they could not qualify for the winter keep grant. At the same time, there were some farmers who did relatively well out of the scheme and who managed to qualify for grant aid well in excess of what could be regarded as a reasonable level of assistance.
Thus, the position in England, Wales and Northern Ireland was that a large number of genuine hill farmers were

excluded from assistance and, within those who were eligible, the money was not being distributed fairly. The solution we proposed was to pay winter keep assistance in the form of a supplement to the hill stock subsidies so that any farmer who was eligible for the hill cow or hill sheep subsidies would be given an extra grant towards the cost of feeding the stock in the winter. This proposal was welcomed by the N.F.U. and, during the course of the Annual Review discussions, we decided that the supplements should be at the rate of £5 a head for eligible hill cows, and 3s. 6d. a head for eligible hill sheep.
Here, I should say a word about Scotland, because hon. Members will realise that the changes which we are discussing do not apply north of the Border. I do not need to explain that conditions in many parts of Scotland are quite different from those in the rest of the United Kingdom. It is felt that direct encouragement should be given to the production on Scottish hill farms of at least a proportion of the necessary winter keep, and that much of the land in marginal upland areas might deteriorate rapidly unless encouragement is given to regular rotational working.
In addition, because hill land in Scotland is graded into three categories, as the hon. Member for Edinburgh, West (Mr. Stodart) knows, it is possible to weight the acreage payments in favour of the man at the top of the hill. This form of land grading has never been undertaken south of the Border, and facilities for it are not available there.
However, there is one complication. Many Scottish sheep farmers do not have much in-bye land on which to grow winter feed, hence the amount of grant which these farmers can claim under the scheme is low in comparison with the rate of 3s. 6d. per ewe which will be payable in England, Wales and Northern Ireland. The headage payment of 2s. a head will help to maintain parity of benefit on the two sides of the Border.
I have already mentioned that these proposals were welcomed by the N.F.U., but I would not like to give the House the impression that this is additional money that we are giving to hill farmers. What we are doing is to redistribute approximately the same amount of money


in what we think is a fairer way. In fact, as my right hon. Friend expressed it on 22nd December, the assistance will be related more closely to the need.
Since 10,000 additional farmers are expected to benefit by this change, it will be obvious that some of those who enjoyed the benefit of the scheme last year will be getting rather less assistance in future. In fact, a few of those who were previously eligible for the grant will not be eligible at all under the new arrangements.
There are a number of reasons for that, but usually it will be because, although they occupy eligible hill land, their management or breeding policies do not qualify them for the hill stock subsidies. If, of course, they change those policies so as to fit in with the requirements of the hill stock subsidy schemes, they will be eligible for the subsidy and the supplement.
Finally, may I say that the new arrangements will make for much greater simplicity both for the farmers and the Ministry. There will be no complicated conditions to understand, or forms to fill up, and the farmers will claim the winter keep supplement automatically on the same form as they use for the hill cow or hill sheep subsidy. Virtually the whole of the administrative cost of the Winter Keep Scheme—about £127,000 a year—will be saved. I am sure that this must commend itself to the House. This revocation scheme will, therefore, pave the way for the new arrangements I have described, which are fully supported by the N.F.U., and I whole-heartedly commend the scheme to the House.
Now perhaps I may turn to the Prayers against the Hill Cattle and Hill Sheep Orders. I confess to feeling a little surprised that the Opposition have put down Prayers against these Orders. As I have explained, these, like the Winter Keep Revocation Scheme, are intended to put into effect decisions taken at the recent Annual Price Review as a result of the study of the hill subsidies which my right hon. Friend asked me to do as soon as we took office. I am glad to say that the reports which I have received show that these changes have been welcomed by the hill farmers as being fair and reasonable and in the best interests of the hill farming industry.
Statutory Instruments No. 970, No. 984 and No. 991 all seek to put into effect the increase in the rate of hill cow subsidy. In the past five years this rate has been £12 per breeding cow or in-calf heifer. At the Annual Review the Government decided to increase it to £13. At the same time, as I have already mentioned, it was decided that there should be a winter keep supplement for each eligible animal of £5, making a total of £18 in all. The subsidy and the supplement are not distinguished separately in the Order because there is no provision in the basic legislation for showing the composition of subsidy payments for any one class of stock.
Statutory Instruments No. 988 and No. 990 put into effect an alteration in the maximum permitted stocking ratio for the hill cow subsidy in England, Wales and Northern Ireland. I should explain here that under the old 1953 hill cow subsidy scheme undesirable anomalies had arisen because of the lack of precision on this point. The original guidance from the statutory committee set up to advise the Minister on the exercise of his functions under the legislation was that the land we were aiming to assist would not normally be capable of carrying more than one cow to eight acres on a traditional system. This ratio was accordingly applied strictly to farms consisting partly of eligible land and partly of better land, but for farms wholly eligible higher rates were accepted if the land could carry a greater number.
Over the years the introduction of different husbandry methods such as the sale of calves rather than yearlings, and also the improvement of pastures, made the one to eight ratio bite too hard on some partly eligible farms. At the same time their neighbours might be getting subsidy on one cow to six acres or even more on identical land. Hon. Gentlemen opposite clearly felt that this was inequitable and a maximum stocking ratio was introduced in the 1964 statutory Schemes of one cow for each six acres of eligible land for both wholly eligible and partly eligible farms.
This new rule had very little effect on the vast majority of farmers who had wholly eligible farms, but most of those with partly eligible land who had been restricted to the maximum ratio of one


cow per eight acres were able to benefit by the increase in the permitted ratio. However, it was pointed out to my right hon. Friend that a maximum ratio of one cow per six acres of eligible land was biting hard on some farms and that this might tend to discourage farmers concerned from continuing to improve their land. I would remind the House that it is one of the objects of the Hill Cow Subsidy Scheme to improve the pastures on which the cattle graze and we can require part of the subsidy to be used for that purpose. My right hon. Friend therefore decided to relax this maximum stocking ratio slightly. The amending Orders fix a maximum of one cow for every five acres of eligible land on which subsidy may be paid in England, Wales and Northern Ireland.
In Scotland, however, there is no statutory maximum. The Scottish Scheme has always differed slightly from the other Schemes because of the different conditions north of the Border. However, each farm in Scotland has been given its own maximum stocking ratio beyond which subsidy payments will not be made.
In all three Schemes for the United Kingdom there is nothing to prevent a farmer from carrying more cattle on his land if he so wishes, but he will not receive subsidy payment for the surplus numbers.
Statutory Instruments No. 971, No. 992 and No. 993 represent, in the Government's opinion, one of the most important changes which have been made in the form of agricultural support to the hills for some time. Hitherto the rate of hill sheep subsidy has always been directly related to the economic conditions in the hill sheep industry during the previous 12 months.
Although this system worked reasonably well as regards the rate of subsidy finally agreed upon, it had several drawbacks. For one thing, the subsidy was always paid a year in arrear of needs; and, for another, as a farmer never knew from year to year whether there would be a hill sheep subsidy or what the rate would be, he was handicapped in trying to plan ahead. The advice, therefore, given to the Minister both by his technical advisers and by the farmers' unions

was that the subsidy should be placed on a continuing flat-rate basis within the Annual Review, and he agreed.
The Statutory Instruments seek to put into effect the new rates at an amount sufficiently generous to cover the normal variation in weather conditions from year to year. For England, Wales and Northern Ireland the standard rate of subsidy will be 18s. and the reduced rate of subsidy 9s. While acknowledging that last year's rate was 25s., I may add that this standard rate of subsidy of 18s. compares very favourably with the average over the last five years of 9s. 6d. To both standard and reduced rates is added the 3s. 6d. winter keep supplement, making totals of 21s. 6d. and 12s. 6d. respectively.
For the same legal reason that I mentioned just now, these are the figures that appear in the Payment Orders for England and Wales and Northern Ireland. In the case of Scotland, where there is only the standard rate of subsidy, the figure is the same 18s., to which is added their winter keep supplement of 2s. which I mentioned earlier in my speech, making a total of 20s. in the Order. Statutory Instrument No. 972 ensures that the 2s. winter keep supplement is paid in Scotland only in respect of sheep maintained on eligible winter keep units.
I would like to conclude by assuring the House that my right hon. Friend is very conscious of the problems that hill farmers have to face. The House will have noted that in paragraph 11 of the Annual Review White Paper the Government announced their intention of
carrying out a review of the fundamental problems of the hills and uplands to consider urgently what more should be done to make the best use of the agricultural resources in such areas, having regard to the economic, social and other factors involved.
As I said when I began, we are pressing on rapidly with this fundamental review, and my right hon. Friend will inform the House when we have firm proposals to put before them. However, when the present Government first came to power we decided to put right, without waiting for the longer term inquiry, those things which could be corrected without delay.

Mr. Timothy Kitson: Can the hon. Gentleman say when he expects this report to be made?
Will it be in the near future or in several months' time, or when?

Mr. Hoy: I should not like to put a date to it. It is rather a big job. The hon. Gentleman will know that we have been pressing ahead with it and we have to consider the opinions of all the parties concerned. What we are doing is to gather these opinions and to take these steps which I have mentioned and which have met with the approval of the farmers on the hills and the farmers' unions concerned.
I conclude by saying that these Statutory Instruments which have been laid before the House and which we are discussing tonight are to put into effect our short-term measures. I hope that they will meet with the approval of the House, and I ask the House to approve these nine hill cow and hill sheep Orders as well as the Winter Keep Revocation Scheme.

10.40 p.m.

Mr. Anthony Stodart: Mr. Speaker, I am sure that all hon. Members are grateful for your consideration in allowing us to co-ordinate the debate on the affirmative Resolution and the Prayers. Winter keep is so closely linked with the hill subsidies as virtually to be indistinguishable therefrom in certain cases, and no increase or reduction in arty of the three production grants can be regarded in isolation. All play their part in a sector of the agricultural industry, whose importance I myself have never at any time failed to emphasise. Indeed, I think that I might be entitled to be surprised at the hon. Gentleman expressing surprise that we tabled these Prayers. It would have been a very retrograde step and would certainly have met with the criticism of the Minister of State, Scottish Office if a Scottish Member had not probed whether Scotland was keeping in line over the hill and sheep subsidies in view of the switch which has taken place south of the Border.
My first point is about the hill subsidy of 18s., the regular payment which has been introduced. I imagine that the Government were delighted to be rescued from the difficulty they were having in their Price Review negotiations with an intransigent National Farmers' Union, as I understand it, by the suggestion which

came from my right hon. Friend the Member for Argyll (Mr. Noble) that there should be a regular rate of hill sheep subsidy. I imagine the relief with which they went to the National Farmers' Union and suggested this idea. I rather thought that the hon. Gentleman might have paid acknowledgment to us for the suggestion.
I think that the Government have not gone as far and as wisely as they might have, because the suggestion that we have made and the pledge that we have given is that there should be a fixed subsidy and that there should be a second step which should take account of bad weather conditions. Although I of course recognise that 18s. is higher than the average of the last four years, until Chancellors of the Exchequer average farmers' Income Tax returns over a period of years one must realise that 18s. is a drop of 7s. from the last severe winter's rate and—one must bear in mind the possibility of another bad winter and we have been informed by the Government that there is no intention to revise this rate in the near future.
Having said that, may I ask the Minister of State this? What calculations I have made lead me to believe that an 18s. subsidy will cost roughly £4½ million over the United Kingdom. As the hill sheep subsidy now takes its place within the Price Review structure whereas previously it was outside it, can he tell the House—this is an important point—whether it was taken into account in the calculation this year which resulted in his right hon. Friend saying that there was a plus £10 million award? Perhaps he will tell the House when he replies.
I should like now to put to him one or two points about Scotland. Under what I might call the old system, we had three grades of grant averaging £3 10s., the hill cow subsidy of £12, and the hill sheep subsidy, which averaged 9s. 6d. The winter keep grant is to be continued and will average £3 10s., and the hill cow subsidy has been raised by £1 just as it has been south of the Border. At first sight, however, the higher supplements in England and Wales and Northern Ireland of £5 and 3s. 6d. compared with no grant for cattle in Scotland and a 2s. supplement for sheep do not look too good to many farmers. Of course, I realise—I think that this is a point which the Minister might well


emphasise—that our winter keep acreage grants are to be maintained. Can be assure us that the hill grants in Scotland have been properly provided for in this manipulation?
That leads me to what I believe will be some hard individual cases. Will the Minister tell us what will be the position of the hill farmer in Scotland whose farm is either so high or so exposed that he cannot cultivate at all, and therefore gets no winter keep grant? He will, almost certainly, be in category "C", and therefore eligible for £5 an acre. I was interested in two figures which became available to me yesterday. In the annual report of the Department of Agriculture in Scotland, I read that 14,500 farms were eligible in 1964 for winter keep. A reply which I received yesterday from the Minister said that 9,250 grants had been paid. There is, therefore, a discrepancy of 5,250. Can he explain the reason for this? I believe that there may be a few who do not bother to apply, but I have a suspicion that there are many in the category which I have described, who, though eligible, cannot cultivate and are therefore suffering badly compared with their counterparts in England.
By way of example, I would tell someone to go into Scotland by way of Otterburn and Jedburgh, and to go to the top of Carter Bar. I do not know what the grading is of the farm on the Scottish side at that spot—I suspect that it is a "C" grade—but it is certain that the man on the English side will get £18 for his hill cow, whereas the man on the Scottish side will only get £13, probably with no cultivation ability to make up the deficit. It is possible that some of these farms may be able to raise a crop on five or ten acres and would therefore get possibly £25 to £50 over and above the hill cow subsidy. But these farmers—I should be grateful if the Joint Parliamentary Secretary could give us the numbers of those who are unable to take advantage of the scheme—in the type of farm in the "C" category should be given the same headage terms as exist in England and Wales solely for the "C" grades where cultivation is not possible.
The Minister said that the hill sheep subsidy supplement of 3s. 6d. and 2s. in the two countries—it might be more accu-

rate if I said in the four countries—would apply to farms eligible for winter keep. Could be say what farms there are which get the hill sheep subsidy but which do not get winter keep? In other words, what farms will get the 18s. with no supplement? It seems slightly extraordinary, since the hill sheep subsidy regulations are drawn far more tightly than the hill cow subsidy regulations, that there should be a farm which is eligible for the hill sheep subsidy but not eligible for winter keep.
It would, I think, be wise for the Minister to confirm what he said about the hill sheep supplement being only for farms which are eligible for the hill sheep subsidy because something which appeared in the Scottish N.F.U. publication the Farming Leader seemed rather ambiguous. It should be cleared up. The publication stated:
Accordingly"—
and this was its account of the Price Review
the Government agreed that the present acreage system in Scotland should remain entirely intact and that an additional winter keep supplement of 2s. per hill ewe will be paid on farms eligible for winter keep".
The Minister will see the ambiguity in that. When I read that I wondered whether the hill sheep subsidy had been extended to cover every farm eligible for winter keep.
Many of my hon. Friends and I believe that these schemes are good, but I am doubtful if the Government are fully aware of the urgency of the beef situation. From the action they took in the Price Review in connection with the dairy herd, the 1d. increase, I do not imagine that they expected to get much increase in numbers in the dairy herd, which supplies us with 70 per cent. of our beef. Although the hill cattle numbers in Scotland have doubled since 1951, a considerable achievement, it will need a greater stimulus than an extra £1 per head on the hill cow subsidy because, if the Government are going slow on the dairy herd, it is to the hills that we must go for our beef supplies.
In each of the last three years the consumption of beef per head of the population has gone up by 2 lbs—that is, for every one of the 50 million people in this country, and by 1970 there will be an additional 2 million people. The


problem is, therefore, a considerable one. I was staggered to hear the Minister say the other day that a modest increase was wanted in the supply of beef. When replying to my hon. Friend the Member for North Angus and Mearns (Mr. Buchanan-Smith) the Minister used the phrase "a slight improvement". If there is one thing that that Minister is not particularly renowned for it is his expressions of moderation. Therefore, when I heard him talk about "a modest increase" I pricked up my ears. It was an effective announcement, but a wrong one. As far as they go, the proposals are good. But I detect in their introduction by the Government a spirit of considerable complacency.

10.55 p.m.

The Minister of State, Scottish Office (Mr George Willis): I do not wish to occupy much time in this debate because, quite clearly, a large number of hon. Members wish to take part in it. I do not wish to answer the general points raised by the hon. Member for Edinburgh, West (Mr. Stodart), but perhaps I may be allowed to answer the specific Scottish points.
The hon. Member asked whether the Scottish hill farmers were as well off under the new arrangements as were the English farmers. As far as we know, they are. Scotland elected to maintain the acreage payment, and this was done following discussions with the Scottish N.F.U., with the Hill Farming Advisory Committee and the Scottish Agricultural Advisory Council. Not only was it felt that direct encouragement for the production on hill farms of at least a proportion of the necessary keep was desirable, but it was considered that much of the land in our marginal upland areas would deteriorate rapidly unless specific encouragement was given to regular rotational working. These were the arguments that applied. The hon. Gentleman probably knows better than I do, but it is generally considered that the Scottish farmers do as well as the English; in other words, Scotland maintains its position.
My hon. Friend the Member for Edinburgh, Leith (Mr. Hoy) will reply to United Kingdom questions but, if I understood the hon. Gentleman aright, his other specific Scottish point was—arising from his two Parliamentary Ques-

tions yesterday—the fact that 9,290 farmers had received grants under the Winter Keep Scheme in respect of the year 1964, whereas 12,632 had received payment in 1963, and 13,376 in 1964, for subsidy for hill cattle. The hon. Gentleman wondered what the difference was—

Mr. Stodart: No, perhaps it would be right, for the sake of clarity, to get the hon. Gentleman lined up on this matter. I said that the Department's Report on agriculture in Scotland stated that 14,500 farms were eligible for winter keep grant, and that 9,250—I think that was the figure—received winter keep grant. What has happened to the 5,000—it has nothing to do with the hill cattle scheme—in between?

Mr. Willis: Some of them have not made claims—the hon. Gentleman made that point himself. A great part of the difference is made up by the fact that, as I understand it, a number were very small units. I understand that that is the main reason for the difference. A total of 14,600 farmers are eligible, and the number making the winter keep claim is 9,250. The difference is due to the manner in which the total number of eligible farmers is calculated. Some of the farms are very small, indeed—

Mr. Stodart: I must persist in this point. Is it not the fact that whereas the National Farmers' Union agreed in principle, and wanted the retention of the acreage grant, it also raised the point of these "C" farms, which are eligible but cannot claim because they cannot cultivate; and that they suggested to the Government that there should be the headage alternative in that category? This is a most important point, and I hope the hon. Gentleman will face it.

Mr. Willis: Whilst there may be something in what the hon. Gentleman says, I think that he, too, is confused. All the farmers who did not claim are not in the "C" category—a large number are not—so the hon. Gentleman is really confusing the issues—

Mr. Stodart: Mr. Stodart indicated dissent.

Mr. Willis: With great respect, I think that he is. The fact is that they do not claim. That is the short answer to the hon. Gentleman's point.

11.0 p.m.

Mr. George Y. Mackie: There are one or two points which I should like to make on the grants in general. Scotland, particularly in the south, will suffer because we have no headage payment and we are concerned at the effect that sheep subsidy will have on good husbandry. It will encourage to a large extent the old and rapidly running down system of sheep farming without cattle. Many farms in the Highlands do not have arable land. If they have one field it is better kept for the house cow for the convenience of the farmer's wife. No land is used as arable, and there is nothing that will improve land more than putting cattle on it.
An additional headage payment would be of immense assistance to the hill farmer. I have done this kind of farming myself and know that it can be done. One can buy in all the feed. Cattle-raising would improve the quality of the herbage and therefore improve the sheep. I would never condemn an extra subsidy to hill farmers, but without the headage payment for hill cattle the subsidy for sheep would be a bad thing from the point of view of husbandry on hill farms. I hope that in his review the Minister will tackle this point.
Another point is the inability of the upland marginal farmer to keep cows if he wants the marginal subsidy. This drives those farmers in these areas who keep cows—and they need the milk—into fundamental errors of husbandry and business management. If one keeps cows one should keep as many as one can. The same applies to the man who improves his land and wants to fatten his sheep. He should be able to go in for good, simplified and streamlined husbandry. In Scotland the N.F.U. and others need to look again at the headage payment. I have received letters from eminent and able farmers on the point. I should like to have the Minister consider it and hear what he has to say about it.

11.3 p.m.

Mr. Marcus Kimball: Before the Minister goes into this fundamental review of hill farming in Scotland,

I hope that he will look at three points which arise out of the Orders and which need consideration.
The first is on the Hill Sheep Subsidy Payment (Scotland) Order. If he will study the form which he sends to hill sheep farmers he will see that one is not allowed to claim the subsidy unless one has the native breeds of Scotland—the Cheviots, the Black Face, and the various Island breeds. This mitigates against somebody who is trying to improve the fertility of flocks in Scotland. I know of several experiments which have now been stopped, because the subsidy is lost if one continues with some of the experiments which many of us would like to see go on.
I do not quite know how we are to get over this problem. The hon. Gentleman may well agree that, if one is conducting some of these experiments, with the support of the North of Scotland College of Agriculture, it should be agreed, when the experiments are started, that one will draw the hill sheep subsidy on so many experimental ewes, even if they are not of the traditional native breeds which are listed on the back of the subsidy form. I ask him seriously to consider that point.
My second point follows on from what was said by the hon. Member for Caithness and Sutherland (Mr. George Y. Mackie). The hon. Gentleman said that the hill sheep subsidy at this rate encouraged people to over-stock their farms, to over-graze the hills, and so on. In my view, he should have gone further and said that the hill sheep subsidy at this rate encourages people to keep five-shear sheep, old ewes which should not be on the hill at all. People are inclined to say, "All right; we will keep her for one extra year and draw the subsidy". This is a kind of attitude which one ought to think about very carefully. Surely, with this very high headage payment, we ought to do something to make hill sheep farming more efficient, and we shall not do that by keeping old sheep on the hill. It is very doubtful whether one ought to go on with the payment on the five-shear sheep, with the six-year-old ewe on the subsidy form at all. Most subsidy forms show a tapering off, and there is only a small number of them, but, in my view, they should be cut out altogether.
If our object is to improve the standard of hill sheep farming, the subsidy paid for the one-shear sheep not put to the ram should not be paid at the same rate as on the one-shear ewe which has been put to the ram. If the subsidy is to encourage and improve the standard of hill sheep farming, we must look more carefully at the conditions attached to the giving of it.
Now, a point about the hill cattle subsidy. At present, the emphasis is that one should try to get one's hill cows calving earlier and earlier. Many people, on the advice of the North of Scotland Agricultural College, are going all out for December or very early, almost uneconomic, calving. What is the object?—in order to be quite sure that, when the inspector comes round, one draws the subsidy before the October sales, as a sort of little proviso on the hill farm. The idea is to get one's calves big enough to be punched before being sold in October.
I ask the hon. Member to look seriously at this point and make up his mind whether or not, in the areas which are drawing winter keep grant and which are eligible for the hill cow subsidy, the calf subsidy should be payable for three months. The latest figures published by the Rowett Research Institute show what is happening. If one is to keep cows on the hill and have them calving in the spring, one should not keep the calves on the cows for much more than three months, and I ask the hon. Gentleman to consider whether the calf subsidy should be payable to the person who keeps the cows as an additional incentive. I hope that he will consider the question of paying the calf subsidy for three months in the areas which are drawing the maximum amount of winter keep grant.
We have had many discussions on the question of winter keep and hill farming. I hope that the hon. Gentleman will bear in mind that there is one way to improve hill farming, that is, to take another approach to the direct reseeding grants payable under the winter keep scheme. Of course, one can get a hundred per cent. lambing on the hills, but what happens? The hills are not capable of providing enough grass to feed more than one lamb per ewe. The only way to improve productivity on the hills is to go all out for a decent grant payable to

people who, under the winter keep scheme, reseed their hills. It is no good just making one big payment in one area. One can go to the Islands and see how people have taken advantage of big grants, put down lots of grass seed—very expensive—and put in a lot of fertiliser—again expensive—but they have completely failed to maintain the grazing. We must take a leaf from the Forestry Commission. We should make the payment for reseeding under the Winter Keep Scheme spread over five or seven years to start with at £11-£12 an acre and a maintenance payment over the next few years.
I hope that the Minister will consider this matter seriously, because a lot of money is being wasted under the Winter Keep Scheme. A lot of grants are given for reseeding, but the areas are not being properly fenced and maintained.

11.11 p.m.

Mr. Peter Mills: I am particularly pleased that I am able to say a few words in this debate, for two reasons. One is that it concerns many of my constituents, men who have to work hard under difficult conditions to earn a living and men who, let us recognise it, produce some of the finest store cattle in the country. The country needs these men. It needs these store cattle to maintain our beef supplies. Once again, I reiterate that we must look to the hills and the moors for our store cattle.
Secondly, I am particularly interested in these schemes because I am, I suppose, the only hon. Member who has been thrown out of one of them.

Mr. Kimball: My hon. Friend is not the only one.

Mr. Mills: I beg pardon. I admit that it occurred several years ago. I worked hard on the farm and brought it up to standard under the Livestock Rearing Act. I was told that I had done too much, and I was thrown out. In a real way, therefore, I look with envy at these large grants per cow.
The Government have stated that they intend to give more aid for these hill areas and this is being done by the schemes: for sheep at the flat rate, and an increase in the hill cow subsidy. I certainly welcome these increases; they are fair enough. But what about the hill


areas that do not come within the scope of the Act? The farmers who have been rejected under the recent Review represent a serious omission, which affects many of the small farmers in my constituency. The Minister promised that something would be done, but nothing has been done yet. Perhaps by the introduction of new legislation which was promised they could be included.
What does the Minister intend to do about this group of farmers who are so severely affected? The problem concerns not only my constituency, but other constituencies in the South-West. I have no doubt that if a Conservative Government had been returned, something would have been done.

Mr. Jeremy Thorpe: Is it within the hon. Member's recollection that hon. Members from the West Country, including, to their great credit, Conservative Members, went time after time to the Minister but precisely nothing was granted to us? Why this optimism?

Mr. Mills: The reason for my optimism is that we were promised that the question would be looked into after the Review, and I am certain that this would have been done. I am not making a fuss about this matter. It is a difficult problem and these people well deserve help.
Consider some of the small farmers. In the Halwell and Beaworthy area there are difficult farms on the hungry land, as we call it, farms which are quite unsuitable for anything except the rearing of store cattle, which cannot grow corn and where the cattle have to be taken in a month earlier and let out a month later than in other areas, where it is extremely difficult to provide enough winter keep and where the farmers are nevertheless doing a grand job raising store cattle and rearing beef calves. We cannot afford the loss of these sources of store cattle. The £13 hill cow subsidy makes all the difference to their profit and loss. For a small farmer it probably makes a difference of between £150 and £200 a year, £3 or £4 a week, a very large sum. I am sure that this is a problem with which the Government must deal.
Paragraph 2(1) of the Hill Cattle Order speaks about the number of cattle per acre. Is this a permanently fixed num-

ber? If so, it will not encourage better grazing and better management. Obviously, if money is spent on fertilisers and better grass seed, a higher stocking rate is needed and this should have been encouraged. As a boy on my first farm I was always taught, "If you put a penny in the chocolate machine, you get a bar of chocolate out". I am certain that many farmers are putting in the penny, spending the money on fertilisers and seeding and better management, and I hope that this number of cattle per acre is not permanently fixed.
What does the phrase "hill cattle" in the Explanatory Note mean? It may be obvious, but is it confined to certain breeds of cattle? In my experience the crossing of certain cattle breeds can produce some fine results, with more milk and more calves, and it is sometimes possible to put on another calf because of the extra milk.
What is meant by the phrase "hardy sheep" in the Hill Sheep Order? This seems to be a rough and ready way of putting it. Is it confined to hill sheep on the moors, the sort of sheep we call "Scotties", or down moor sheep? If it is, it is a pity, because once again crosses are playing an ever-increasing part in improving the stock on the moors. Some excellent crosses can be obtained from crossing these sheep with other rams—better carcases and more prolific. This is important, because as management improves and the stocking rate improves, we shall need to get a better type of lamb on the hills and moors.
I know that other hon. Members wish to speak and I hope that the Minister will be able to answer these questions and in particular deal with the issue of the farmers who have been excluded from the hill cow subsidy.

11.19 p.m.

Mr. Jeremy Thorpe: Echoing what the hon. Member for Torrington (Mr. Peter Mills) said, may I remind the hon. Gentleman that on 29th June, 1964, the then hon. Member for Workington (Mr. Peart), now the Minister of Agriculture, said to the then Minister of Agriculture:
What does the right hon. Gentleman intend to do for many of our small farmers in the hill farm areas? We must examine closely some of the difficulties created by his review of the cow subsidy for instance. What


sort of development are we to have for our hill areas?".—[OFFICIAL REPORT, 29th June, 1964; Vol. 697, c. 953–4.]
It will be within the recollection of the Minister that the hon. Baronet the Member for Tavistock (Sir H. Studholme) took the matter a stage further on 10th November in an Adjournment debate when he pointed out that while one would welcome an extension of the winter keep scheme and an extension of the hill cow and hill sheep subsidy arrangements, we still had a very grave problem of farmers who were essentially hill farmers, but who had been declared ineligible.
When we are considering these Orders it must be remembered that they will create even greater divergences between those who qualify and those who do not. In fact, the whole argument really is that the text of the Minister's speech was taken from Mark, Chapter 4, verse 25:
For he that hath to him shall be given, and he that bath not, from him shall be taken even that which he hath.
Would it not be right to say that a farmer who is ineligible for hill kine or hill sheep is, ipso facto, ineligible for winter keep as well? Is it never possible for an exception to be made, for a man on a hill farm who keeps either hill cows or hill sheep, but who is for purposes of the Livestock Rearing Act and the other Acts which followed it, ineligible because he is a farmer who has just got to grow winter keep, because he is still trying to stock his land?
On the hill farms in Devon, something like two-ninths of those who were eligible have now been declared ineligible. A total of 173 have been pushed out of the scheme. They have no hope of benefitting from any of these Statutory Instruments.
There are cases like the tenant farmer I know whose farm is 700 to 800 ft. in elevation. In 1962 he entered into a livestock rearing scheme for £5,000. He relied on the subsidy to help him in the repayment of interest on that money and now, before the scheme is even finished, he has been pushed out of the cow subsidy.
Another owner-occupier, who is, again, on very steep land, went in for a £4,000 livestock rearing scheme in 1956 and was told that his farm was suitable only for this system. Before the completion of this scheme he was pushed

out. The National Agricultural Advisory Service told him, when he asked what other system he could adopt, that it was virtually impossible for him to alter his system.
These are some of the problems of hill farmers. Another very brief example is that of 255 improvement schemes under the Livestock Rearing Act. There was one farm in north Devon which was selected as being representative of all of them. It was a farm 750 ft. up, with clay soil needing £25 an acre to put the land in good heart. The largest stock was stones and rushes. This is the sort of farm which is now to be put out of the hill cow subsidy. It is going to cost the farmer up to £75 a year on his annual income. While we welcome the institution of winter keep, and improvements in hill cow and hill sheep subsidies, we are dealing with the problem of small farmers in hilly areas, who can make very valuable contributions to beef-rearing in this country. I hope this will be looked into at the earliest possible moment.

11.25 p.m.

Mr. John Farr: When the Winter Keep Scheme was introduced on 22nd May, 1963, at 10 o'clock, several hon. Members complained of the difficulty when we had complicated schemes of that nature introduced at such a late hour.
The right hon. Member for Kilmarnock (Mr. Ross), who is now the Secretary of State for Scotland, was one of those who objected at the time. Another was the right hon. Member for Workington (Mr. Peart), now the Minister of Agriculture, along with several other Members. The right hon. Member for Kilmarnock said:
It is a very serious matter indeed that we should be discussing these Schemes so late"․[OFFICIAL REPORT, 22nd May, 1963; Vol. 678, c. 587.]
Now that they form the Government, they still seem to find it very difficult to discuss important and vital schemes of this nature other than late at night.
At the moment there are six hon. Members on the back benches opposite. That is the highest number since the debate began more than an hour ago. The average has been about four. I formally call attention to the fact that there is not a quorum present.

Notice taken that 40 Members were not present;

House counted, and, 40 Members being present—

11.26 p.m.

Mr. Farr: When this scheme was discussed in 1963, hon. Gentlemen opposite odbjected to the discussion taking place after 10 o'clock because, they said, that they had had a long and difficult day discussing agriculture. But at least the discussions that day were on an important matter of real urgency to the country, and we did not waste time, as we have done today, with the party opposite trying to push through, against the wishes of the country, a futile policy which is of no earthly use to anyone. [Interruption.]

Mr. Deputy-Speaker (Sir Samuel Storey): Order. I hope that hon. Members will listen to the debate quietly.

Mr. Hoy: On a point of order.

Hon. Members: Sit down.

Mr. Hoy: I do not require advice from hon. Gentlemen opposite. If we are going to debate the steel industry again, which is what seems to be happening, I think, Mr. Deputy-Speaker, that you had better rule on whether we are to have an opportunity of replying to it.

Mr. Deputy-Speaker: We are discussing these Orders, and nothing else.

Mr. Farr: I should like to refer for a moment to some of the effects which the revocation of the Winter Keep Scheme is likely to have, not only on hill farmers, but on farmers in the lowlands of England. Together, these Orders must have the effect of discouraging the growing of crops in the Highlands and in the qualifying areas in the uplands, because we are abandoning the Winter Keep Scheme, and because increased headage grants are to be paid, which in turn will encourage herd and flock expansion.
I think that this is a very sensible policy, and is far better than endeavouring artificially to stimulate the growing of winter keep crops such as oats in areas which are naturally ill-suited to that type of farming, or, to put it another way, are better suited to another type of farming.
It follows that if upland farmers are to increase their stock, and to grow less winter keep, they will have to meet their needs of winter fodder by considerably increased purchases. If the Government have recognised this fact, they have given no outward indication of it.
Are the Government expecting that the much increased winter keep requirements of upland farmers will be met by increased imports from abroad? If so, why, in view of the continual balance of payments difficulties into which they have steered us? Could the hon. Gentleman tell the House what is the extra amount of winter feed which he has estimated that the hill farmers will have to buy as a result of the introduction of these various new schemes and the revocation of the Winter Keep Scheme? The hon. Gentleman, the Liberal, the Member for Devon North (Mr. Thorpe), may think these matters remarkably amusing, but there are other hon. Members on both sides of the House who attach a great deal of importance to these schemes. If the hon. Member cares to interrupt me I will allow him to do so.

Mr. Thorpe: I am grateful to the hon. Member. He said I find these matters amusing. I find them serious. I do not find them matters on which to call a Count, nor do I find them matters on which to discuss the steel industry. I find them matters arising out of these Statutory Instruments.

Mr. Farr: I was saying that I could perceive that the amount of extra feed which, as a result of these proceedings tonight, the hill farmers will require to purchase could run into a considerable amount, and I was asking the Joint Parliamentary Secretary if he had formed some estimate of the extra requirements of the hill farmers.

Mr. Hoy: I would just point out to the hon. Gentleman that this was why this £5 allowance was made under the hill cow subsidy and the 3s. 6d. for hill sheep for winter keep. If the hon. Gentleman would just keep that in mind he would not require to look for outward signs whether this was taken into consideration or not.

Mr. Farr: I fail to follow exactly the point of that interruption. I was trying to ask the hon. Gentleman if he formed


an estimate of the extra amount of winter keep farmers would have to buy, rather than rear it themselves, as a result of these measures tonight. I thought that a perfectly reasonable question to ask.
I could perceive that this extra purchasing requirement could run into many thousands of tons, if not hundreds of thousands of tons, in a season, and yet the Government, in this Price Review, took no step to counter the rapid decline in oats production in this country, and, moreover, cut the price of barley, which today is a very important feedingstuff—

Mr. Hoy: Oh.

Mr. Farr: —by over 5 per cent., although in 1957—

Mr. Deputy-Speaker: Order. I think that the hon. Member is going beyond the Orders we are discussing.

Mr. Farr: I was trying, Mr. Deputy-Speaker, to point out that the Government have given no indication that they were aware at all that there would be a considerable demand for extra winter feed to be purchased from grain-growing counties in this country and that all they had done in the Price Review was to discourage grain growers as far as they could by imposing on the grain growers cuts under the 1957 Act.
Although I find it strange to see them abandoning the Winter Keep Scheme which they welcomed only a couple of years ago, I find it probable that in the national interest, and in the national interest of agriculture, and in the interests of greater efficiency, this scheme is replaced by the type of scheme which they envisage to encourage production of more animals on hill farms and to lead grain growing to areas more suited to it, but I regret that the Minister has not coupled with this desirable move actively encouraging grain growers in our grain growing counties to meet the needs of these hill farmers.
There is one other point I wanted to ask the Minister about. In the reply to a Written Question tabled on 22nd December, 1964, the Minister said that he proposed to end the present scheme of winter keep grant next year. Yet I see in the table given in the Price Review this forecast that in 1965–1966 £3 million will be spent on the Winter Keep Scheme. I should be graceful, in view of the

Minister's statement in December last, if he would clarify that point.

11.35 p.m.

Mr. Alick Buchanan-Smith: I welcome the contribution that these Orders make to farming in hill areas in Scotland and elsewhere. I am convinced that if we are to utilise properly our resources in these areas it can only be done by giving support in the kind of way that is contained in these Orders.
It is as well to be clear about the main purposes of helping farming in these areas. In the light of the present food situation not only within Britain but in the world, it is clear that one of our chief purposes must be to get an increased supply of beef calves. Mention of this has already been made in the debate.
I should also like to refer to the need to encourage the production of store lambs because, as many hon. Members must be aware, over the last few months and, indeed, over the last year or so, there has been a decline in the numbers of sheep in some of the lower areas which supply store lambs. In particular in the present Price Review there has not been encouragement for this class of low ground store lamb production, and in these circumstances we have to look more towards the hills for the supply of store lambs in the future. In discussing Orders of this nature we must look beyond the purely economic effects. We have to think also of the social benefits which result from encouraging agriculture in these areas in terms of community life and maintaining a reasonable standard of living.
Coming to specific Orders, I should like to refer first to the hill sheep subsidy. I welcome the higher rate of subsidy, but I wish to reinforce the argument of my hon. Friend the Member for Edinburgh, West (Mr. Stodart) in that in increasing the hill sheep subsidy to a rate of 18s. it would have been better if this had been put on a two-tier system and the insurance element of the subsidy had been maintained. There is no doubt that the hill sheep subsidy as it was before had little effect on the hill farmer taking a decision on the number of ewes that he was going to have. It varied very much from year to year and it did not provide a basis for planning.
In this respect I welcome the increase in the subsidy. It will be possible for the first time to use the subsidy as a definite factor in policy which can affect the decisions taken by farmers. On the other hand, we must not undervalue the benefit of the insurance type of subsidy which we had before. I have moved for many years amongst hill sheep farmers. I myself farm on the edge of a hill sheep area, and in a very bad winter such as that which we had two years ago, but for the high subsidies which came in the following year, many hill sheep farmers would have been forced out of production in view of the tremendously high losses.
I ask the Government to consider whether in the future it would be possible to put this subsidy on to a two-tier basis with an element that would carry a steady rate from year to year, to be decided at the Review, and also above that an element of insurance to compensate for bad years. I would imagine that the average of these two elements together would run at something like the 18s. which we are getting in the hill sheep subsidy this year.
Passing to the Winter Keep Scheme, I should like to reinforce what my hon. Friend the Member for Edinburgh, West said, that whilst we welcome the extra 2s. for hill ewes in areas that qualify for the winter keep scheme, I would have thought that there would be a case for giving it also on a headage basis, as an alternative, to hill cattle as well. In areas where one has these sheep one is just as likely to have cattle as well. As the hon. Member for Caithness and Sutherland (Mr. George Y. Mackie) said, to have cattle in those areas as well is often in the interests of good husbandry.
I would ask the Minister of State to look again at the question of the 5,000 farms, at the difference between those eligible for winter keep and those which actually apply for it. The discrepancy is so big that I should be interested to know how it is made up. I appreciate that there are some who do not apply, and also there are some who are very small, but I cannot believe that it is all made up of these elements. If the hon. Gentleman cannot answer the question to-night—

Mr. Willis: That is the answer.

Mr. Buchanan-Smith: —perhaps he will do so on another occasion.
The Government should reconsider the question of dairy farms in upland areas qualifying for winter keep. In certain areas in the Highlands there is a great problem of milk production. Sometimes at certain seasons milk is extremely difficult to get. It may have to be transported over very long distances, and sometimes it arrives several days after it has been produced. There is also the specific point of including barley as a qualifying crop.
I turn to the question of hill cow numbers per farm. I welcome the slightly greater element of flexibility introduced in the Order for England and Wales. I appreciate that for Scotland the attitude has always tended to be rather more flexible. I believe that the decision as to how many cows on a particular hill farm should qualify for subsidy should be related not to the resources of the farm over the whole year, as it tends to be, but to the grazing capacity of the farm in the summer months only. Only in that way can we utilise the resources of the hill farms fully.
I believe that we should take an integrated view of agriculture, and if we are to make full use of our agricultural resources we should have specialisation between different types of farm. If hill farms which have good grazing and can carry cows in the summer are to carry the cows in the winter as well, the type of feedstuff to be purchased is not the kind that we import from abroad of the protein type. It will be largely of the roughage nature, hay, or draff, a byproduct of our existing industries. To this extent it would not put any burden on our balance of payments.
After all, this is a natural thing. This is what happens if a farmer owns a hill farm and a low ground farm; he takes the feed up from the low ground farm to the hill farm. I cannot see why those who farm hill land only and do not have a low ground farm as well should be penalised. If this is done and the decision on how many cows are to qualify for a hill cow subsidy is related to the summer grazing capacity of the farm, we shall get much better utilisation of our resources.
The basic purposes of the Orders are to get more calves and more store lambs. As the Joint Parliamentary Secretary said, we must look at the Orders not in isolation but together, and we must look at all the types of assistance available for hill farms. I support what was said just now about the regeneration of our hill pastures. It is an extremely important point. With a higher rate of grant, we could increase production in hill areas tremendously. As the rate of grant stands, it is simply not worth anybody's while undertaking regeneration. Much more extreme operations are necessary for success. These cannot be financed with the present meagre grant. It often means the expense of moving back into the hills, and the construction of roads to get further back, if we are to be able to use these hill areas properly. Another point in this connection is that of the greater provision of capital for the hill areas. I appreciate that the Hill Farming Act and the Livestock Rearing Act were revoked a year or two ago. I understand that they were revoked because insufficient use was being made of them. It is my contention that insufficient use was made of them because each farm had to undertake a total scheme for the whole farm; it could not undertake a scheme on a piecemeal basis in the same way as the farm improvement scheme.
If farmers were allowed to undertake schemes of this nature on a piecemeal basis, greater use would be made of this and more capital would be put into the hill areas. I mention this because I think that we have to look at all the different aspects of the assistance which can be given to hill farms. If we can put more capital in the hill areas, we shall get far greater return on schemes such as this—

Mr. Deputy-Speaker: Order. I think that the hon. Gentleman is now going rather wide of the Orders.

Mr. Buchanan-Smith: I bow to your ruling, Mr. Deputy-Speaker. I was pointing out how more use could be made of these schemes. Naturally, when public money is being used in hill areas, it is the wish of the House, I am certain, to make sure that the maximum return can be secured for this money. This can be ensured by putting more capital into

the hill areas. A great deal more research could be made into the application of improved techniques in these areas on a farm scale. Many such techniques have been developed by institutes and research associations throughout the country. If we could see that they are developed further and if we could extend experiments to a farm scale and not as isolated institute experiments, much more use could be made of them.

11.47 p.m.

Mr. Paul Hawkins: Norfolk has not many hills, and it may therefore be wondered why I am on my feet. I have great sympathy for those who come from the areas involved. I drove across Dartmoor a few days ago with my headlights on and wondered how anybody could produce stock in such areas, until animals started looming up on the road in front of me. I welcome anything which can be done to increase beef stores. Norfolk produces a lot of winter yarded cattle and this is a very expensive business. We have lost a large number of Irish stores which used to come into East Anglia, as well as a large number of stores coming from the dairy herds, due to the decreased number of dairy cattle.
The profitability of yarded cattle is extremely low, and because of these new prices, the range of fat cattle in Norfolk, according to most of my farming friends—

Mr. Deputy-Speaker: Order. The hon. Gentleman must relate what he is saying to the Order before the House.

Mr. Hawkins: This is the first time I have debated Orders such as these, and I shall do my best to keep within the rules.
We need the store cattle from hill areas very much. We particularly need crosses. I would support those hon. Members who have asked that non-pure-bred types should receive the subsidy. We do not want the pure-bred Galloways and Angus for the yarded cattle, but we do need the crosses. We need them in large bunches of good types and we need cheaper transport to get them to our areas.

Mr. Deputy-Speaker: Order. There is nothing about transport in these Orders.

Mr. Hawkins: I regret getting out of order. I would merely add that I welcome anything which will produce cheaper and better quality store cattle.

11.50 p.m.

Mr. Timothy Kitson: Tonight is very important for the agriculture industry, not only because of this important debate on winter keep and other hill farming problems but also because there have been some interesting discussions taking place across the road at No. 10. I have no doubt that when the Minister replies he will tell us how the leaders of the N.F.U. have got on in their talks with the Prime Minister tonight. We all look forward to learning what has been happening at that meeting and—

Mr. Deputy-Speaker: Order. Not on the Orders before the House.

Mr. Kitson: If the Government had been as generous as the Minister led us to believe they were being when he introduced the Orders I dare say that those discussions would not be going on now. It is relevant to that extent.

Mr. Hoy: Has the N.F.U. been protesting against these Orders?

Mr. Kitson: The N.F.U.—

Mr. Deputy-Speaker: Order. Hon. Members must keep to the Orders.

Mr. Kitson: I hope that the Minister will not consider that the set figure on both sheep and hill cattle, which has been determined for a period of three years, should be too rigid. While I accept that the figure is better than we might have hoped for, but not as good as it was a year ago, we must recognise that in a winter like we had in 1963 the present figure would not be high enough. I hope, therefore, that we will be given an assurance that the Government do not intend to be too rigid about the three-year period.

11.52 p.m.

Mr. Peter Bessell: At this late hour I do not propose to delay the House for long. I would not like this occasion to pass without saying something on a subject which is of the greatest importance to many of my constituents and to small farmers and hill farmers in the extreme South-West.
The concern expressed by my hon. Friend the Member for Devon, North

(Mr. Thorpe) and the hon. Member for Torrington (Mr. Peter Mills) about the exclusion of a number of small farmers and hill farmers from the scheme is a matter which concerns many people. I hope that the Minister will give an assurance on this matter.
I represent an area in which there are a number of small farmers who are excluded from the terms of the scheme and who, therefore, do not benefit under the terms of these Orders. Nevertheless, we are considering something that is a step forward and I do not hesitate to say that, as far as it goes, we naturally welcome it. If we can maintain this progress it will be to the benefit of those farmers who so far have suffered considerably through lack of Government action.
In Cornwall, in my constituency and in the constituency represented by the hon. Member for Cornwall, North (Mr. Scott-Hopkins) there are a large number of hill farmers who are dependent on assistance of this kind. These men and women have been farming difficult land for many years and have had great difficulty extracting a living from it. Despite this, their rate of productivity has been remarkably high. It is a tribute to their ability as farmers that they have been able, in these conditions, not only to produce a living for themselves but to contribute to the nation's wealth in terms of food.
I hope that the steps that have been taken under these Orders will be continued, and that there will be further progress towards giving further assistance to these very hard-working members of the community who farm under the most difficult conditions possible, and who receive a very small return for their labours. I hope, too, that the Minister will give very serious consideration to the problems of those farmers who, by every argument of logic, should be included in these schemes but who, unfortunately, are not able to avail themselves of the benefit of these Orders.
I do not propose to say any more, because I feel that the points have been admirably covered by hon. Members on this side. I only regret that there has not been more heard from the other side of the Chamber, because I am quite sure that people in the agricultural constituencies of members of the Government


party will expect to hear that their Members have taken part in a debate which affects their vital interests. As I have said, I believe this to be a step forward, but it does not go far enough. I hope that further provisions will be made in the months ahead.

11.57 p.m.

Mr. Michael Jopling: These Orders are of the utmost importance to my constituents. Westmorland is one of our largest and most important areas of hill farming. One of the most important changes in the hill farming picture in England and Wales over the next few years was debated last week when we dealt with the Commons Registration Bill [Lords]. I find it strange tonight to follow two Liberal Members—[HON. MEMBERS: "Three."] The hon. Member for Bodmin (Mr. Bessell) and the hon. Member for Devon, North (Mr. Thorpe)—[HON. MEMBERS: "Three."] I will make the point between two and three of them in a moment, if I may be allowed to—because when we discussed the Commons Registration Bill, which only affects England and Wales, many of us were horrified that those Liberal members from the far extremities of Wales and south-west England did not see fit to attend our debate.
Moving to the Orders—

Mr. Thorpe: On a point of order, Mr. Deputy-Speaker. Although the House is no doubt greatly interested to hear of the condition and the emotions registered by the hon. Member on an occasion long past now and no doubt will be anxious to hear about his medical state of health in the future, is it necessary in our discussion of these Statutory Instruments?

Mr. Deputy-Speaker: I was about to draw the hon. Member's attention to the fact that there was nothing about Liberals in the Orders, when I heard him say that he was moving to the Orders.

Mr. Jopling: It is all very well to have Orders dealing with hill sheep and hill cattle subsidies, but I want the Joint Parliamentary Secretary to say whether he can do something to improve the genetic quality of the animals themselves—

Mr. Hoy: If I attempted to reply to that point, I should be out of order also.

Mr. Jopling: I should have thought that when we were talking about subsidies for hill cattle and sheep, it was of vital importance under these Order to discuss ways of breeding the animals and of improving the blood. It is vital that the Ministry should provide its good offices to see whether we can create a pool of the best blood possible for the livestock in our hills—

Mr. Deputy-Speaker: The hon. Member can make incidental reference to them, but he must not go into too great detail.

Mr. Jopling: I am sorry to be out of order, but I should like to move to the Winter Keep Scheme. This is a subject which is very dear to me, because shortly after I first came to the House a few months ago I had the luck to be drawn in the Ballot for Notices of Motion and I was glad to give notice to the House that I would draw attention to the scheme.
This was one of the most burning problems among farmers in my constituency during the last election. I am sorry that the old scheme has been abandoned so summarily. There was a good deal of merit in it. Everyone in the House welcomed the extra help which it provided for hill farmers. There is no question that the type of farmer who most needs help is the small upland farmer, particularly in the remote areas. There is also the marginal land which exists a little way down the valley in many cases which is too good to qualify for the hill subsidies but still not good enough for the farmer to make an easy living out of it. These are the areas where farmers have had disappointing results in the last few years.
One of the main difficulties of the old Winter Keep Scheme, as the Joint Parliamentary Secretary has said, was that whereas about 19,000 farmers qualified for the hill cow and sheep subsidies, only between 11,000 and 12,000 qualified for the winter keep subsidy. This meant that the people who deserved help the most were not getting it. I hope that when the hon. Gentleman winds up the debate he will explain whether he thinks it will be possible to revive in some way the principles of and the good work carried out by means of the old scheme.
There have been several reasons for its failure. One has been the balance between 60 per cent. livestock-rearing land and 40 per cent. for other enterprises. There is no question also that many farmers found it difficult to submit their claims. Many hill farmers, like most of us who make our living from the land, find it difficult to deal with books. We find it one of the hardest parts of farming to have to deal with the office side after dealing with the physical problems. I do not know what experience the Joint Parliamentary Secretary has of farming but I am sure that he knows what we are talking about. I hope that it will be possible for the hon. Gentleman to indicate that he will try to revive in some way the ideals of the old Winter Keep Scheme.

Mr. William Hamling: The hon. Member said that 10 minutes ago.

Mr. Jopling: It is all very well for hon. Members opposite to make remarks.

Mr. Deputy-Speaker (Dr. Horace King): Order. It is not all very well for hon. Members to make remarks of that sort. I hope that hon. Members will listen to the hon. Member for Westmorland (Mr. Jopling).

Mr. Jopling: I am most grateful to you, Mr. Deputy-Speaker. These are matters of vital importance to those of us who make our living from the land. [AN HON. MEMBER: "The hon. Gentleman should declare his interest."] My interest is well known.
Some very hard cases have occurred from time to time, and I know that the Minister is aware of some of them. Here is an example which occurred under the hill cattle subsidy. A farmer bought a farm some years ago, when milk was in demand, and he pursued a milking policy on that farm. There was no objection from the Ministry, and, in fact, he received certain grants for the purpose. Some years later, the Ministry said that the land was eligible for livestock rearing grant and it complained, milk having become more plentiful by that time, about the milking policy being carried on on the farm. In fact, the Ministry threatened that, if the policy was pursued

further, the grants already paid might have to be refunded, its reason being that, although the land was eligible for livestock rearing grant, it was not suitable for milk production.
Some years after that, the livestock rearing grants were withdrawn from the farm. The Minister knows that this sort of thing has happened on many farms in the past year or two. In response to his protest, the farmer got the quite astonishing reply that, whereas his farm was formerly suitable for livestock rearing, it was now suitable for dairying, cash cropping and fattening stock. I have seen that farm, and I simply cannot understand how anyone could attempt to make a living out of it by dairying or cash cropping.

Mr. Deputy-Speaker: Order. I have listened to the hon. Gentleman for some time, but I have not seen the relevance of what he is saying. He must link his observations to the Order.

Mr. Jopling: With respect, Mr. Deputy-Speaker, the relevance is that, under the Order, there is land which qualifies and land which does not for the hill cow subsidy. At one time it was said that this particular farm was in and at another that it was out. The way these matters are worked is of great importance to my constituents. I am glad to have had the opportunity to raise these points, and I hope that the Minister will be able to give a satisfactory reply.

12.3 a.m.

Mr. James Scott-Hopkins: We have had a wide-ranging debate, and I am sure that the speeches of my hon. Friends will have shown hon. Members opposite how serious and important a subject this is for those farmers who are affected by the way these hill subsidies work and by the withdrawal of the old Winter Keep Scheme and the substitution of various other measures for it.
The Winter Keep Scheme was brought in in 1963 in order to help farmers on the hills to improve not only the land which they themselves were farming but also the land on which their stock was grazed, sometimes common land. The scheme has, I think, been a success, although there have been difficulties, particularly higher up the hills.
My hon. Friend the Member for Torrington (Mr. Peter Mills) and the hon. Members for Devon, North (Mr. Thorpe) and for Bodmin (Mr. Bessell) have referred to the farms which have been cut out from the various schemes. The main point is the definition of eligibility.
Hon. Members will, I am sure, agree that there should be comparability throughout the country. That should be the basis. I am not at all sure, however, that what the Joint Parliamentary Secretary said in opening the debate to the effect that more farmers will receive the additional hill cow subsidy of £18 is exactly right. As I see it, we come back to the question of definition both for the hill cow subsidy and for winter keep as it applies until tonight's scheme takes effect. Both are exactly the same.
I will not read the definition as laid down on page 2 of the 1963 Winter Keep Scheme because it is well known to hon. Members who are interested in these matters. That definition is exactly the same as for the hill cow subsidy payment areas. It is on that livestock rearing land, which is known as eligible land, the hill cow subsidy and the supplement are to be paid. The subsidy is to be paid only for the eligible land.
The definition for the Winter Keep Scheme was exactly the same. Provided however, that a farm had both eligible and non-elegible land—land which qualified and land which did not—if 60 per cent. of the farmer's income as shown on his return was derived from the hills and not from barley, potatoes and milk, he qualified for the winter keep subsidy for the whole of his farm. My understanding is that as a result of the abolition of the former Winter Keep Scheme, that farmer might well receive less subsidy under the new Scheme because the extent of his eligible land might be quite small in total. I should like the Joint Parliamentary Secretary to confirm whether in that case the farmer will receive less subsidy.
One wishes to make certain that nobody will suffer. It was not the intention of the Minister or of the Joint Parliamentary Secretary that a farmer should suffer as a result of the new Scheme. We need to establish clearly what the payments will be. For example, on the occasion of the review of which hon.
Members from Devon constituencies have complained, several farms in the Holsworthy area in particular were taken out of the Hill Cow Scheme; they were not in the livestock rearing area. By a special extension of the scheme in 1964, however, my right hon. Friend the Member for Bedford (Mr. Soames), the Minister's predecessor, brought back the Holsworthy area within the scope of the scheme so that farms which qualified under the new definition were eligible for the hill cow subsidy on a special basis. Will those farms continue to be eligible and will they qualify for the increase, as I imagine they will? I ask only so that it may be made plain that these farmers will be eligible.
My hon. Friend the Member for Edinburgh, West (Mr. Stodart) spoke about the hill sheep land. Will the Joint Parliamentary Secretary confirm whether the land which is eligible for hill sheep subsidy is exactly the same as the eligible land for the hill cow and winter keep subsidies? I have a suspicion that the hon. Gentleman will find that the definition is not exactly the same.
I remember, when I dealt with these matters in former days, the subtleties of definition of the land which qualified for payment. There was a subtle difference between the definition of land which was eligible for the hill cow subsidy and that which qualified for the hill sheep subsidy. Perhaps the Joint Parliamentary Secretary will explain whether that still applies.
I hope that the Parliamentary Secretary will make a point of saying that the £6·2 million to increase the hill sheep subsidy is included in the Annual Price Review for the first time and is part of the £10 million plus which the Minister has put before the House and the country. This is rather an underhand way of making up the figure of £10 million plus, because on last year's basis this £6 million would not have been included in the Price Review determination. Page 40 of the White Paper says specifically that for the first time in the 1965 Annual Review the hill sheep subsidy is being included. I am sorry that the Minister and the Parliamentary Secretary have been saying that the figure was £10 million plus, comparing it with the previous year's figure, because it is not. It


is a straight addition of £6 million for the hill sheep. It is now in hand and it is a good thing to have, but the figures are not comparable. In the 1964 Review there was an increase of £6·3 million which was not included in the £34 million plus increase of that time.
It is right that we should have covered almost every point of importance to the hill farmers and I hope that the Parliamentary Secretary will be able to convince us that what he is doing by raising the hill cow subsidy by £1 and the supplement, to take the place of the winter keep grant, by £5, making the whole £18, with 21s. for a ewe, is enough to stimulate the growth of productivity on the hills. If we are to get increased productivity we shall have to increase stores and have better grazing in the hill areas. This can be done only by grants such as the winter keep, so that these farmers can be enabled to farm these difficult upland areas and put in proper seeds and use proper fertilisers and work the land as far as they can and as much as they can. This is vital.
I am sorry that the old Winter Keep Scheme has been abolished. I am glad that the cow subsidy has been increased to £18, but I wish that the Minister had done something for those farms a little down the hill where cultivation is possible and for those on common lands such as Bodmin Moor mentioned by the hon. Member for Bodmin where many of his constituents live and work. I wish that some kind of winter keep grant had been kept for farmers in the difficult areas to encourage them to go ahead and increase their productivity on this hard and difficult land.
I am sure that the scheme has been worth while and that it would be valuable to have such a scheme related not only to the livestock rearing areas, but to the areas further down the hill, strengthened by the advice of the N.A.S. or the Agricultural Land Services, which-ever was preferred. I hope that the fundamental review of which the hon. Gentleman spoke will not take too long and that its results will include constructive proposals to help farmers in these areas to increase their productivity. I am sure that the winter keep grants would have been one of the best ways in which to do so.
The farmers who are to receive the hill sheep subsidy and the addition to it will want to be certain that the arrangements about the percentage of hill flocks have not been changed, that is to say, as between the sheep qualifying for the subsidy and the flock on the lower rate. I hope that the Parliamentary Secretary will also deal with the point of my hon. Friend the Member for Gainsborough (Mr. Kimball) about broken-mouthed ewes in the flocks in England and Wales and maintaining the balance. I am sure that this is of importance if we are to improve the type and quality of the flocks running on the hills. On the whole, we are glad that these grants are being made. I still regret that winter keep has not been kept in a modified form, but I am certain that those on the hills will take the maximum benefit from this and try to reach the target the Government are setting.

12.20 a.m.

Mr. Hoy: The hon. Gentleman asked about our bringing forward some fundamental proposals for dealing with the upland areas. Goodness knows that hon and right hon. Gentlemen opposite were in office for a time and we have been there only six months. One would have thought that if it was as urgent as that the hon. Gentleman would have done something about it.
We are having to carry out a fundamental review to see how to get the best out of the hills and the uplands. We believe that the farmers in these areas should make their contribution to the obvious needs of the country. I was surprised to hear the hon. Gentleman the Member for Edinburgh, West (Mr. Stodart) speaking about the ever-increasing demand for meat, year after year. The previous Government did nothing about it in their Price Reviews. We have added this £1, and he says it is not enough. It may not be, but at least it is an improvement.
That is not the end of it. A complete answer is that we must look at the broader picture of all the increases the Government made at the Annual Review to encourage a moderate expansion of the home production of beef. There has been an increase in the guaranteed price of cattle of 4s. per live hundredweight, an extension of the calf subsidy, an increase


of 10s. in the rate of the subsidy and, thirdly, an increase in the hill cow subsidy which we are dealing with tonight. We can only hope that it will be of some help to the industry and to our meat supply.
Hon. Gentlemen opposite have said that they regretted that we did not carry over at least a part of the old Winter Keep Scheme. In lieu of that scheme, there is going to be this supplementary payment. It is not that the Government has said "You are going to have it, whether or not you want it". This was reached in agreement with the N.F.U. and all the people concerned. It was one of my jobs, as Chairman of the Hill Farming Advisory Committee, to go into this with all the farmers concerned on the N.F.U. They all thought that this would be a better way of dealing with the problem. That is why these headage payments are to be made. If, instead of using this money to buy winter keep, they want to use it for cultivation they are at liberty to do so. There is nothing to prevent them doing so, and I hope that they will.
I understand the problems of certain farms which have been excluded from the hill cattle scheme. In fact, I have corresponded with all the hon. Members who have raised the matter tonight. Perhaps they might have added that in a few cases—and it must be remembered that these farms were excluded before we took office—we were able to do something to rectify the situation and put back people who had been left out. I am not saying that that was done in many cases. [HON. MEMBERS: "Not enough".] It really is extraordinary. Hon. Gentlemen opposite were responsible for excluding these farms, and we have included some again. I should have thought that they would have been grateful for what we have done. I cannot make firm and fast promises, but we are well aware of the problem that certain farms do not qualify because of the test of eligibility.
Let us be fair about this. Criticism should not be levelled at the county agricultural executive committees and their panels who go to inspect. On every occasion when it was necessary to exclude a farm the matter was dealt with in the fairest possible way. The issue was not decided merely by a cursory glance at the farm. There was a careful inspec-

tion to make sure that the decision was the right one, and I pay tribute to those committees and panels for the work which they have done.
I give the House the assurance that these difficulties will be considered during our review, but I think that it would be foolish of me to make any promises tonight, and to say that I can assure all concerned that these matters will be put right. Nobody in this House could say that. All that I can do is to assure the House that these problems will be considered.
The hon. Member for Torrington (Mr. Peter Mills) asked whether the stocking rate was fixed permanently. As I said in my opening speech, the maximum ratio is 1 to 5. Whether farmers have any more on their land or not, the subsidies will be paid on that ratio. That is the ratio which has been fixed, and what we have done is to increase it on this occasion—I agree not by very much—but to that extent the farmers will benefit. According to my information, few farmers have this maximum ratio, but what we should like to do is to encourage them to get up to it.
I was a little surprised when the hon. Member for Gainsborough (Mr. Kimball) asked what type of sheep would be eligible on the hills. The answer is exactly what the Order says, and what the Act says—hardy sheep. Anybody who is interested in this subject knows which breeds are permitted under these rules. In fact, some small alterations have been made with regard to the type of sheep permitted on the hills. It is not the Government who define what is a hardy breed. I am sure that the hon. Member for Cornwall, North (Mr. Scott-Hopkins) will bear me out when I say that his noble Friend, who was Chairman of the Hill Farming Advisory Committee, knows that we meet farmers concerned and then decide which breeds should be admitted for the purpose of the subsidies.
The purpose of the subsidies is to maintain hardy sheep and hardy cattle on the hills. It is true that hon. Gentlemen opposite think that one or two other breeds ought to be included, but I take the advice of farmers in this matter. They know whether the breeds are hardy in the accepted sense. The hon. Member for Gainsborough might be interested to know that some research has been carried


out to find suitable breeds, and that it has been decided to learn a little more about one type before deciding whether or not it should be included. I assure him that there is no rule which debars a breed if it qualifies as a hardy sheep, and if it is accepted there is nothing which will keep it out of the scheme.
The hon. Gentleman the Member for Edinburgh, West asked me about the 18s. and the 3s. 6d., and I will just reply by saying that anybody who qualifies for the 18s. will get the 3s. 6d. as well.
The hon. Gentleman the Member for Harborough (Mr. Farr) had a great deal of difficulty in getting to the point of the Orders at all. He said that, while we were abolishing winter keep, apparently there were no visible signs that we were replacing it. I found this very difficult to understand, because there was not another Member in the House who had not understood that the £5 and the 3s. 6d. were being paid for the very purpose of providing winter keep. They are a substitute for the old scheme. Farmers get this money to buy keep if they cannot grow it for themselves, but, as I said, if they want to use any part of this for cultivating their own winter keep, then they are at liberty to do so.
The hon. Gentleman really was going a little far about the grain agreements. I do not want to get out of order, but I would just say this to the hon. Gentleman, that he knows perfectly well that these grain agreements, whether we agree with them or not, whether we like them or dislike them, were agreements entered into by his own Government. I am not criticising them for that, but they were the people who entered into the agreements with their international friends—

Mr. Farr: Not the growers as well.

Mr. Hoy: With all due respect—but I had better not take this too far, and I will finish by saying that they were entered into by his own Government, whom I am not criticising, and with the agreement of the N.F.U., and so if we are maintaining these agreements the hon. Gentleman must not come along and complain, unless he argues that the agreements are all wrong and ought to be renegotiated.

Mr. Farr: Mr. Farr rose—

Mr. Hoy: No. I have given way—

Mr. Deputy-Speaker: The point which the hon. Member raised was out of order, and so the answer must be out of order. We have discussed this point enough.

Mr. Hoy: Yes. As I was saying, I was simply replying to the hon. Gentleman because he had great difficulty in getting to the Order at all. He got it all mixed up with steel, and he tried to call a Count. I was not very sure what he was after tonight.
The hon. Gentleman the Member for North Angus and Mearns (Mr. Buchanan-Smith) was quite generous, I think, in welcoming the Orders tonight and the help to the hills. He also called for a considerable amount of research which, he said, was still required to be done. I am not denying that research is called for. All I would say to him is that if this is to be done there are certain agencies for carrying it out. Improvements will have to be made, and this will be looked at in the course of the review. As he will agree, a great number of things will have to be reviewed. All I can give him assurance on tonight is that this will be looked into.
One other question which was raised was that of losses in disaster years. We have never laid down in the Regulations that during a year of disaster a certain payment will be made. What we endeavoured to do was to fix this flat rate of subsidy, which, I will say quite confidently, is welcomed by all the farmers concerned—welcomed by them all because it lets them know exactly what their income is to be, and allows them to plan ahead. We have had disasters in years gone by, and I remember them quite clearly, and on two occasions I remember that special measures had to be taken by the Government of the day to meet the situation. I have no doubt at all that in similar circumstances, if disaster did overtake us, any Government would take action of the same kind. Quite obviously, however, we cannot legislate for disaster years. We can only legislate for what we think is likely to happen.

Mr. Kimball: I would draw the hon. Gentleman's attention to the fact that the subsidy rate is fixed four years in advance. If we get a series of increases


in shepherds' wages, will this also be taken into account so that we can still have an increase in the hill sheep subsidy, which is 5s. below what it was last year, in spite of the fact that there has been a 10s. increase in wages?

Mr. Hoy: The hon. Gentleman is asking me to go a little too far tonight in saying whether there will be any alteration in the subsidy to take account of any change in wages in the next four years. This is a matter for the Price Review. No other Minister, in any party, would come to this Box and say that there would be an alteration in any of these Orders if there were a movement in farm workers' wages

Mr. Scott-Hopkins: This is the point that we want to get clear. Under the present system one takes into account the profitability of the flock on the hills. If there is a bad profit year there will be a higher subsidy. What my hon. Friends are worried about is this. If in a certain year profitability were low for any reason, could the hon. Gentleman say that by means of a future Price Review the subsidy could be raised?

Mr. Hoy: This flat rate has been fixed. I am not saying that it is fixed permanently, but we have entered into an agreement. We have not been ungenerous. Over the past five years it has worked out at 9s. 6d. per head. We are now giving 18s. It is true that in the worst year when there was a disaster, it was 25s. But when one considers the 3s. 6d. headage on top of the present rate, it is not ungenerous.
The hon. Member for Edinburgh, West has had to leave for another engagement, but, arising from his remarks, I should like to put on record that the cost of the hill sheep subsidy will be £4½ million.
The hon. Member for Gainsborough asked about old ewes, and my reply to him is that no subsidy is paid for them.
I do not think I can add much more to what I have already said. I have tried to cover as many of the points as I can.

Mr. Scott-Hopkins: Would the hon. Gentleman deal with one point? He seems to be in some difficulty over the cost of the hill sheep subsidy. The White Paper refers to £6·2 million. While the

hon. Gentleman is dealing with that point, would he also answer my question about the Price Review figures for the hill sheep subsidy?

Mr. Hoy: I can go no further tonight. It has never been the custom to disclose how the figures are made up. I will consider the hon. Gentleman's other point.

Mr. Kimball: Before the hon. Gentleman sits down—

Mr. Deputy-Speaker: Order. The hon. Gentleman has sat down.

Question put and agreed to.

Resolved,
That the Winter Keep (England and Wales and Northern Ireland) Revocation Scheme, 1965, a draft of which was laid before this House on 27th April, be approved.

EDUCATION (PRE-SCHOOL PLAYGROUPS)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Sydney Irving.]

12.39 a.m.

Mrs. Shirley Williams: I am grateful for the opportunity to raise the subject of the purpose and financing of nursery accommodation and pre-school playgroups. This is a subject which probably affects more people than does hill farming.
The Education Act, 1944, required local education authorities to give particulars of arrangements made for children under 5. It defined primary education as including nursery education for children between the ages of 3 and 5. In Section 53 of the Act local education authorities were permitted to establish, maintain or manage or assist the establishment, maintenance and management of, among other things, play centres, and subsection (2) asked local education authorities to pay special regard to voluntary societies or bodies whose objects included the provision of facilities or organisation of activities of a similar character. Due to lack of financial provision and lack of teachers, it was impossible for the provisions of the 1944 Act relating to nursery accommodation to be carried out in full.
In 1960, Circular 8/60 announced that no further nursery classes could be provided, although we now understand that in certain cases where there will be a net return of teachers to teaching it may be possible for nursery schools to start. In 1964, according to the statistics, there were under 24,000 children in local education authority directly financed nursery schools, less than 2 per cent. of the under-five age group.
The result has been that there has grown up all sorts of other provision for nursery education and accommodation, including private nurseries and also pre-school playgroups, the subject I am particularly raising now. The need has grown, although the supply has failed to grow at all. The need has grown partly because of the increase in the number of people living in towns, because of the even more substantial increase in the number living in flats, and particularly high flats, because of the earlier age of marriage, and because of the higher birth-rate. For all these reasons the pressure on nursery accommodation is greater than ever before.
We then had the precise figures. But the present provision of nursery accommodation, apart from the very small provision under the Ministry of Education, is an anomaly. It falls between the Ministry of Education's own provision and the provision of the Nurseries and Child Minders Regulation Act, 1948. Under that Act day nurseries and child minders had to register. What is not clear is whether that Act applies at all to the playgroups. The Act says that the local health authority must inspect where children are cared for a substantial part of the day. Nobody has ever defined what is meant by "a substantial part of the day". Understandably, practice varies to some extent from one local authority area to another. Some play-groups are registered and others are not. There are sometimes delays in getting registration and inspection, and there is no provision for the educational quality of the content of playgroups.
Over the last few years playgroups have become more popular. It is hard to say how many exist because, as I have said, some are registered and others are not. One estimate is at least 500 catering for at least 10,000 children; in other

words, already half as many as are catered for by the local education authority nursery schools. Most playgroups are run by non-profit-making committees, and numbers in them vary from eight to 30. They meet from two mornings to five mornings a week. Many—the majority of those registered, I am told—have a trained person in charge, either a nursery nurse or a nursery school teacher. Some are people who run playgroups because the hours are much more convenient than they would be if they returned to full-time or even part-time teaching in the normal way.
Furthermore, playgroups involve parents to a very great extent in making equipment and sharing in the business of helping to finance them. A very small number of playgroups get help from local authorities. Hon. Members will appreciate that I would not wish to name them because that might prejudice the assistance which they give.
In my constituency, there are as many as a dozen thriving playgroups, and they play an extremely important part in one area of my constituency, which is a new town, with people of an average age considerably below the national average. In my constituency too, a rather unusual thing is happening. The new town development corporation is proposing to build—if it gets Ministry approval—a number of purpose-built play centre buildings which will be available for play groups and other purposes. As hon. Members will appreciate, this is rather unusual and very few playgroups get anything like that degree of help.
I want to end briefly, to permit other hon. Members to take part in the debate, by making four straightforward recommendations to my hon. Friend the Joint Under-Secretary of State, Department of Education and Science. I hope that he will be able to mention at least one or two of these suggestions in his reply. The first is that we should like very much to see encouragement given to local education authorities who provide short-term courses for those concerned with the playgroups, in particular, those people known as "mother helpers" or assistants in these groups. My own view is that these courses—one or two already exist at Morley College and other further education colleges, including one in my constituency—could be adapted to the


purpose of ancillary help for teachers in infant schools and would serve a very important dual function.
Secondly, I should like to see some sort of provision for inspection, for the playgroups catering for the 3 to 5 age group. I recognise the difficulties, but I feel that it would be possible to apply at least a code of standards about the kind of work and training which is undertaken by these groups. Nursery school staff might be used for this purpose. Thirdly, I should like to see an anomaly cleared up, and local education authorities empowered to make grants, instead of, as at the moment, being in a shadowy position, uncertain whether they can or cannot. It might that such a grant would be dependent on the provision of some free places.
Lastly, and this is something not entirely within the responsibility of the Department of Education and Science, I would trust that my hon, Friend could discuss with his right hon. Friend the Minister of Housing and Local Government the possibility of the provision of play space for children living in high flats or on council estates. It seems extraordinary that, while local planning authorities must lay down adequate accommodation for cars, there is no such provision for children. This seems to be a case of getting our priorities right.
The playgroups present a very great social opportunity, not just to give children some sort of social surroundings before they enter school, which cushions the shock of entering full-time education, but also the opportunity to involve parents from the very beginning in the educational process, which, I believe, cannot be stressed enough. They provide for a perhaps unique upsurge of voluntary effort, which we should like to see helped by pump-priming activities by the Department which would enable people—especially parents—to make provision in an area where they understand that the State cannot provide for them.

12.48 a.m.

Colonel Sir Tufton Beamish: I am very grateful to the hon. Lady the Member for Hitchin (Mrs. Shirley Williams) for generously allowing some time for other hon. Members to contribute to this Adjournment debate. I gave notice on 11th March, after replies

to some Questions which I had asked, that I should like to raise this subject on the Adjournment. I was unlucky in the Ballot and the hon. Lady was lucky, and I thank her for her gesture.
I agree with practically everything which she said. I hope that the Under-Secretary will give some clear answers to questions which he has been asked. I have a few questions which I should like to add to those asked by the hon. Lady. I hope that the Under-Secretary will not say that he is unable to give considered replies to the points which have been raised until he has had a full opportunity to study the Plowden Committee's Report into all aspects of primary education. These issues are quite clear, and I do not see any reason that clear answers should not be given to clear questions.
First, which Government Department accepts responsibility for the activities of pre-school playgroups? That is not clear. It seemed certain from the replies which I was given that there is some doubt about this.
Secondly, I agree with the hon. Lady that the Nurseries and Child-Minders Regulation Act, 1948, does not seem to be adequate for the situation as it exists today. In the years since that Act was passed there have been a great many changes and I hope that the Joint Under-Secretary will confirm that that is his view, too.
Thirdly, will he confirm that his right hon. Friend is aware of the size of the problem? The hon. Lady mentioned that there were about 10,000 children in the sort of groups to which she referred. I can confirm the accuracy of that estimate. A month ago I checked with the Preschool Playgroup Association, an admirable organisation, and was told that there were about 350 member groups catering for about 7,000 children. I understand that outside that Association are other groups which cater for 3,000 to 4,000 more children, bringing the total figure to 10,000 plus. I hope, therefore, that the Joint Under-Secretary will make it clear to his right hon. Friend that this is a sizeable and growing problem.
Fourthly, I hope that the Department recognises the good work that is being done by these groups. They are a boon to mothers and they provide a useful first step in the sudden change which


comes between a child being at home at the age of 4 and suddenly spending the whole day at school at the age of 5.
Finally, what advice, encouragement and help can the Government offer, perhaps through the local authorities, to these groups? Sitting beside me is my hon. Friend the Member for East Grinstead (Mr. G. Johnson Smith). I am one of his constituents and helped to vote him into this House when he won a great victory in the recent by-election. In both his and my constituencies there are a number of these groups, the organisers of which are waiting anxiously to learn the Minister's views on this subject.
It was a great disappointment to East Sussex—and our constituencies are in the East Sussex education authority's area—that after it had been decided last autumn to allow quite a small sum, about £1,000, in the form of financial aid to these pre-school playgroups in the county, a ruling was given by the Minister of Education that it was not permissible for that to be done. That ruling came as a great disappointment to many people who were giving up much time on a voluntary basis—a mutual aid basis, so to speak—to help run the pre-school playgroups.
It is a poor society that spares no thought and no resources for small enterprises which do not hit the headlines. I hope that the Joint Under-Secretary and his right hon. Friend will spare some thought, and authorise some resources, for these playgroups if they are satisfied that they are doing a good job. If they are not, I hope that they will close them. Above all, let us not consider that the children in these playgroups are too small in number or too young in age to merit a little attention.

12.55 a.m.

Mr. Geoffrey Howe: I am grateful to the hon. Lady the Member for Hitchin (Mrs. Shirley Williams) and my hon. and gallant Friend the Member for Lewes (Sir T. Beamish) for giving me this opportunity to speak in the debate and to say how much we should value the importance of groups of the kind we are discussing.
The hon. Lady referred to them as a good example of voluntary activity. I

take that a stage further and suggest that they are a good example of the way in which voluntary activity acts as the rolling frontier of the Welfare State, carrying forward boundaries and fostering new initiatives.
Very surprisingly, there is only one playgroup, and that is in the most rural part, whereas in the more urban parts, where the need is probably greater, none has so far been started. The one that exists typifies the difficulties about which the hon. Lady spoke. The problem is not only that of the parents of those children for whom groups are available, but of those many others for whom they are not available but who would like them if they were there.
I am told by those who run the existing group that of the calls and inquiries they get the most numerous are from parents who would like a place in the existing group but cannot get in. The other group—and this is the rather odd feature about it—from which calls and inquiries come consist of either parents or ex-teachers who want to start a group but who, when told, as my informants say
… of the practical and financial difficulties we have had to cope with …
feel that they cannot proceed further in case they should land themselves into debt or into legal difficulties. That is a great pity because, with a little official backing, these ex-teachers could put their talents to use in organising playgroups.
It is important that the obscurity surrounding these playgroups should be clarified. They are subject to inspection by the health authorities, where they are registered—the medical officer of health and the health visitors—and get on in the ordinary sense very well with them. We are grateful for the co-operation we get from them, but can the Under-Secretary say whether he regards this as the best long-term solution?
Surely, this is a matter in which his mind—and I do not, of course, speak personally—should not be completely wedded to the Plowden Report, but that more responsibility should be assigned to the local education committees so that they can play a more active part in getting these groups going.
The real thing they need is the advice of and acceptance of responsibility by


the Department of Education and Science. They do not need a great financial contribution; merely, as the hon. Lady said, pump-priming. Again to quote what is said to me in my constituency:
We think that we are providing an essential service which, with a little official help, recognition and backing could be expanded and improved upon considerably and so improve the educational service for all.

12.56 a.m.

The Joint Under-Secretary of State for Education and Science (Mr. Denis Howell): This has been a very interesting debate, and we are grateful to those hon. Members who have taken part in it. If I speak rather rapidly, it is because I want to deal with as many points as possible.
We regard this whole matter of the care of children of pre-school age as of considerable importance, but we are considerably limited by the present state of the law. I say to the hon. Members opposite who represent East Sussex divisions that we certainly recognise the worth of most of these pre-school play groups, which have much in common with the nursery schools—which we naturally find to be the better sort of arrangement, where possible—and they try to share some of the aims and achievements of the nursery school system.
As will have been gathered from what has been said by each of the three hon. Members who have spoken, the rapid growth of playgroups, particularly in middle-class areas and among people who want to organise on a sort of co-operative or collective basis, does not fit very easily into any of the existing legislative patterns. My hon. Friend the Member for Hitchin (Mrs. Shirley Williams) probably knows extremely well the division of responsibility between the Ministry of Health and my own Department. The Nurseries and Child-Minders Regulation Act, 1948, gives local health authorities a very considerable measure of control over what is going on, not just the registration of these playgroups but their organisation and—a point to which my hon. Friend attaches great importance—the quality of the people doing the leadership which is vital in this connection.
My hon. Friend carefully quoted to us that part of the Act referring to a "sub-

stantial part "of the day. It is true that various local authorities interpret that in different ways, and I hope that this debate will help to produce a new awareness of the fact that it should be quite narrowly interpreted so that the local inspectors can visit most of these pre-school playgroups.
On the pre-school playgroups, to which I will return after I have answered some other questions, I should say that because, unfortunately, there is no legislation available which brings them under the control of my right hon. Friend's Department we do not have the detailed information for which I was asked and any figures that I have I would not wish to quote to the House as being worthy of serious consideration.
As for nursery schools, I am sure that everybody would agree that if we could provide more nursery education it would be extremely desirable. It is perfectly true that since the war there has been a general slackening in provision of this character. We would like to have more nursery schools, and nobody more than I. Two of my boys enjoyed the benefit of a nursery school education and now that we have moved to another part of Birmingham my wife and I are apprehensive that our other children will not have the same benefit.
This, however, is a question of priority. I think that everyone would agree that at present, with the shortage of schools, with most school buildings in a dilapidated state and with the tremendous shortage of teachers, our first priority must be the children of compulsory school age. One of our greatest desires is to get more married women teachers back into the profession as soon as their family commitments allow, and we are considering whether an extra spur to the provision of nursery schools is likely to help this.
This week we have sent to every local education authority for details. If the information which we receive is such that we would be encouraged to think that even only a slight increase in the numbers in the teaching profession would result from a more generous allocation of resources to nursery schools, I am happy to tell the House that we are ready to take that step. It would be a worth-while provision to make. The Department has asked the local education authorities to give the information as a matter of


urgency. This is not in any way a delaying tactic. We are anxious that every authority which can produce a case that it would bring even a few teachers back to the profession shall get on with the provision of nursery schools so that this net gain may be brought about.
I was asked about the general question of educating playgroup leaders and making grants. A considerable difficulty is that this activity is not covered by the Education Acts. Ministers are extremely anxious to do something about it. We have had the law looked into once or twice, but we have been advised that we have not the powers. I have to be honest with the House and say that in view of the pressure at the moment it would be optimistic to think that we can introduce legislation in the near future, especially since, as hon. Members have recognised tonight, the Central Advisory Council on Education is sitting.
I appreciate their concern that we should not be held up until the Plowden Report is made, as we expect, in 1966, but that body is taking a great interest in the welfare and care of children under five, the present compulsory school starting age. I am sure that everybody welcomes the fact that it is taking such an important step. That being the case, it would be most unrealistic to introduce a legislative change in matters to which we know that such an important body is giving the closest attention. I am sure that we shall all look with great interest at what its proposals on the matter will be. The hon. and learned Member for Bebington (Mr. Howe) acknowledged that it was a long-term solution to the problem that he was looking for, and my hon. Friend the Member for Hitchin said much the same.
One development which is interesting us is that the pre-school playgroup folk have got together and now have a national association known as the Preschool Playgroup Association. This Association is doing excellent work in giving information about matters of organisation, the establishment of playgroups, and so on. We have had another look at it, and we have asked the lawyers to go into the legal position again. We think that, by taking a very liberal view of what is the purpose of education, we might possibly detect an educational pur-

pose in what is being done, although, perhaps, under the terms of the Act, there is no educational content in a pre-school playgroup itself.
I am glad to be able to tell my hon. Friend that if we find, after our examination, that this is so, we shall be very happy to receive an application for grant from the Association so that it could be given that measure of recognition. There have been previous applications for grant, but they have always had to be turned down. My right hon. Friend the Secretary of State and I are most anxious to see whether we can get this national association within the four corners of the Act, given a liberal interpretation of the word "education", and, if it is possible, we shall be ready to give it some recognition.

Sir T. Beamish: When will the Minister be ready to make an announcement?

Mr. Howell: He will be ready to make an announcement when the lawyers have had another look into it and had another discussion with the Secretary of State.

Sir T. Beamish: A few weeks?

Mr. Howell: I do not expect it to be a long time. If the Pre-school Playgroup Association takes note of this debate or has the information conveyed to it by hon. Members, it will, no doubt, be getting in touch with us fairly soon. At present, having regard to the state of the Act and the difficulties, and the fact that Plowden is sitting, we feel that that is the best way to encourage this development.
I hope that the House will find that a reasonably satisfactory answer, having regard to the state of the law. I am sure that hon. Members will, in any case, feel that the inquiry which we are making in respect of extra nursery education, in order to bring back married teachers, which may well have the very agreeable by-product result of providing a considerable number of additional places for other children in nursery schools, is something upon which they can congratulate the Government.

Question put and agreed to.

Adjourned accordingly at eight minutes past One o'clock.